Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair

Oral Answers to Questions — Environment

Domestic Rating System

Mr. Knox: asked the Secretary of State for the Environment when he expects to complete the review of the domestic rating system.

The Secretary of State for the Environment (Mr. Michael Heseltine): We are currently examining all potential alternatives to the domestic rating system. There are, of course, major issues involved, and it is not yet possible to indicate when we shall be able to make a further statement.

Mr. Knox: Will my right hon. Friend confirm that it is the Government's view that the domestic rating system is unjust? Is he satisfied that the current review is proceeding sufficiently quickly?

Mr. Heseltine: My hon. Friend will be pleased to hear that we are sure that the domestic rating system has great injustices within it. It is because we share his view that we gave the additional commitments to introduce changes. As for the speed at which those changes take place, we made it clear that, in view of the changed circumstances between 1974 and 1979, a different rate of priority would have to be applied while we pursued the public expenditure programmes we are now seeing through.

Mr. Marks: Does the Secretary of State agree that if the Conservatives promise to abolish the domestic rate, that promise will be just as worthless as the promises on VAT, prescription charges and unemployment?

Mr. Heseltine: I think that the hon. Member will be aware that the promises we make on this side of the House we keep.

Mr. David Hunt: Does my right hon. Friend agree that the system is now so filled with anomalies that abolition is the only real answer? Does he agree that another local tax would merely be another administrative tier, that no time would ever be the best time and, taking everything into account, should he not proceed now with replacing the existing system?

Mr. Heseltine: I agree with my hon. Friend's criticisms, but one must be sure that the criticisms we have and agree about the present system are not replaced by an equally deeply held set of criticisms about whatever we put in its place. It is in the second part of the judgment that there is need for caution and proper consultation.

Mr. Oakes: While the Secretary of State is looking at the review of this system and at injustices, will he look at the injustice of his rate support grant and explain to the House, particularly to his right hon. and hon. Friends, why those authorities which have followed his precepts and tried to be prudent and those which have tried to sell council houses have come out worse? If he intends to devise an alternative system to rates will it be similar to the ideas of his right hon. and learned Friend the Chancellor who agreed that reduced direct taxation was at the expense of doubling VAT?

Mr. Heseltine: I think the right hon. Member will be aware of the anomalies that were created in the distribution of taxpayers' support as a result of the totally arbitrary allocations made by his right hon. Friend the former Secretary of State for the Environment. The real concern about the domestic rating system and the levels of domestic rates is the wholly unsustained levels of expenditure that he and the Labour Party are prepared to argue for in local government.

Local Authority Housing

Mr. Gwilym Roberts: asked the Secretary of State for the Environment what are the latest figures available for the annual totals of local authority housing starts and the number of houses currently included in their housing improvement programmes; if he will publish in the Official Report the corresponding figures for the last 15 years; and if he will make a statement.

The Minister for Housing and Construction (Mr. John Stanley): The latest available information is that there were 29,800 local authority housing starts in England in the 12 months ending on 30 November 1980. The housing investment programme submissions by local authorities last August indicated that they were then planning to start about 29,600 dwellings and to improve about 96,000 council dwellings in 1980–81. I shall with permission publish the figures for the past 15 years in the Official Report.

Mr. Roberts: Does the Minister accept that these figures are deplorable? Will he be honest and say that it is Government policies that have destroyed local authority housing programmes and destroyed all hope for millions of people who are on housing lists or are waiting for housing improvements? Does he accept that the Government are leaving a legacy of bad housing which will probably be with us until the next century?

Mr. Stanley: The hon. Gentleman will remember that the previous Administration cut housing capital by half in the lifetime of the previous Parliament. He should also be aware that, at the choice of local authorities, there has been a substantial switch in the public sector from expenditure on new building to expenditure on improvements. So that the hon. Gentleman may have the complete picture he will want to be aware that in the last 12 months for which we have figures improvements to private houses have been the highest since 1975, to council houses the highest since 1973, and to housing association dwellings one of the highest ever.

Mr. Michael Morris: Instead of just publishing lists of figures on housing starts, will my hon. Friend also publish a list of local authorities which hold empty


properties, and the length of time for which they have held them empty? If they cannot or will not improve them, will my hon. Friend make them available to the private sector?

Mr. Stanley: My hon. Friend is entirely right. He will be glad to know that a few days ago my hon. Friend the Member for Melton (Mr. Latham) asked me how many local authorities had had more than 100 dwellings empty for more than a year. The answer was published in the Official Report. My hon. Friend is entirely right that improvement for sale and homesteading represent excellent ways of bringing those empty properties into use.

Mr. Frank Allaun: Will the hon. Gentleman permit the loss caused by the six months' moratorium to be made good after April? Does he recognise that the projected 48 per cent. cut in housing expenditure by 1983 has already reached 51 per cent. with 18 months yet to go?

Mr. Stanley: The moratorium has not affected the total allocation made available by my right hon. Friend for 1980–81. The initial allocation was about £2·2 billion, and that stands. My right hon. Friend has already made clear to the House that should authorities underspend as a result of the moratorium they will be permitted to add that amount of underspend to their allocations for 1981–82.

Mr. Heddle: Will my hon. Friend explode the myth propounded by the hon. Member for Cannock (Mr. Roberts) that housing starts bear any relationship to housing waiting lists? The majority of people on housing waiting lists would as soon exercise the right-to-buy or rent in the private sector.

Mr. Stanley: My hon. Friend is right. A considerable number of those on local authority waiting lists will buy—and willingly—if they have the opportunity to do so. It is significant that during 1980 the number of owneroccupied dwellings in Great Britain rose above 55 per cent. for the first time.

Mrs. Ann Taylor: Will the Minister confirm that the figures for housing starts in the public sector for 1980 are likely to be the worst since 1925? In view of that appalling state of affairs will he give an undertaking that when the final figures are announced he will make a statement to the House and accept his full responsibility for that disaster?

Mr. Stanley: The figures will be announced in the normal way, which has been admirably precedented by the previous Government. It is essential to look, not merely at the figures for new starts, but at other figures as well. If the hon. Lady is concerned about rented accommodation she could do a great deal to contribute to its greater availability by altering the irresponsible commitment by her right hon. Friend to repeal shortholds, which is having the direct effect of taking rented accommodation off the market.

Following are the figures:


Local Authority Dwellings (England) Started and Improved 1965–1979



Dwellings started
✶Dwellings improved


1965
126,755
†37,750


1966
133,537
†30,239


1967
151,045
†28,808


1968
133,033
30,014


1969
116,042
26,560


1970
100,709
40,357


1971
89,871
59,144

Dwellings started
✶Dwellings improved


1972
80,329
97,482


1973
71,736
110,053


1974
95,149
73,494


1975
110,335
36,163


1976
107,608
38,983


1977
81,099
37,551


1978
67,637
60,871


1979
46,647
75,967


1980 (January to November) 
‡26,357
§60,040


✶Including dwellings gained on conversion


†England and Wales (separate figures for England not available)


‡Provisional


§January to September—provisional

Rate Support Grant

Mr. Dobson: asked the Secretary of State for the Environment if he will make a statement on his Department's current assessment of the response of London local authorities to the rate support grant settlement for 1981–82.

The Minister for Local Government and Environmental Services (Mr. Tom King): In the rate support grant debate I explained why it was decided to reverse in part the substantial increase in London's share of the grant in recent years. With a few exceptions I believe that most are responding sensibly and prudently, and endeavouring to make the expenditure savings the Government have called for, to avoid excessive rate increases.

Mr. Dobson: Will the right hon. Gentleman confirm that as a result of the responses of the London boroughs and the Inner London Education Authority it is becoming clear that the Opposition's estimate that £200 million of rate support grant would be lost to London in the forthcoming year is proving correct, and that the figure that the Minister was bandying about of about half that sum is not?

Mr. King: Clearly the extent of the grant loss for London will depend on expenditure decisions which are not yet finalised in a considerable number of authorities. In the present situation the amount of grant that London receives will depend on the expenditure decisions of those authorities.

Mr. William Shelton: May I tell my hon. Friend how much I welcome the new system of grant-related—Hon. Members: Question.

Mr. Speaker: Order. The hon. Gentleman can get the same information over if asks his right hon. Friend whether he is aware.

Mr. Shelton: Is my right hon. Friend aware how much I welcome the new system since it must be better to relate the grant to published criteria than to ministerial whim? However, is my right hon. Friend also aware that many of his right hon. and hon. Friends think that there should be a realistic safety net in this transitional year to avoid too exaggerated a loss by the inner London boroughs?

Mr. King: I am grateful to my hon. Friend for his opening comment. I am sure that it is right that we now


have for the first time ever a system that is open to rational and proper debate, as was evident during the rate support grant distribution discussions in the House.
I understand my hon. Friend's concern about the need for a safety net. He will appreciate that while we seek to install a sensible safety net at reasonable levels of expenditure, one cannot establish a safety net that protects ratepayers irrespective of the level of expenditure incurred by individual authorities.

Mr. Douglas-Mann: As an example of rational and proper debate will the right hon. Gentleman accept that the consequence of the system of distribution of grant introduced by this Government's Local Government, Planning and Land Act is that those local government areas that were foolish enough to elect Conservative councils which loyally complied with the Government's request to cut expenditure—these included Merton and Wandsworth—have suffered the most. Has the right hon. Gentleman read the article in the Financial Times of Monday by Robin Pauley commenting on the disaster that the right hon. Gentleman has created for local government finance as a consequence of his Act?

Mr. King: The first part of the hon. Gentleman's statement is incorrect, and I do not accept the second part either.

Mr. Forman: I recognise the need to curb overspending local authorites such as the London borough of Camden, but can my right hon. Friend give any reassurances to outer London boroughs such as the London borough of Sutton which has followed and observed all the guidelines issued by central Government and has had amongst the lowest administrative overheads of all local authorities?

Mr. King: May I say something that applies to all hon. Members? We have made no secret of the fact that the rate support grant settlement is very tough. It involves a 3 per cent. volume reduction for every authority. It involves a 1 per cent. reduction of grant. Both those create considerable problems for a considerable number of local authorities. They involve, also some shift in the share of grant for London compared with the past two years. I recognise that that poses problems for a number of authorities. However, London's share of grant is still at a higher level this year than it was in any year before 1978–79.

Mr. Graham: What advice can the Minister give to London boroughs such as mine in Enfield which are Torycontrolled and which have spent the past two years faithfully following every diktat and whim of the Minister, and yet have found that they have to pay this additional London tax? Will he invite the London borough of Enfield to send representatives to Marsham Street so that he can tell his political friends that the result of their devotion to his policies has been this additional kick in the teeth?

Mr. King: The share of grant that London receives is at a higher level than in the first three years of the Labour Government. We believe that this is a fair basis for the rate support grant distribution. My advice to the London borough of Einfield and to every borough and council in the country and their ratepayers is that their interests are best served by a prudent and responsible council which

seeks to minimise its expenditure, and that the long-term interests of the ratepayers will be severely jeopardised by authorities that do not follow that advice.

Partnership Committees

Sir William Elliott: asked the Secretary of State for the Environment if he will give his reasons why the private sector is not included in the membership of the partnership committees.

Mr. David Hunt: asked the Secretary of State for the Environment if he will give his reasons why the private sector is not included in the membership of the partnership committees concerned with urban problems.

Mr. Heseltine: We want to keep the partnership committees and the attendant bureaucracy as small as possible. But we believe that involvement of the private sector is vital to the regeneration of the inner cities, and intend to make urban grant conditional on there having been effective consultation with local industry and commerce.

Sir William Elliott: Does my right hon. Friend appreciate that that answer is most welcome? Does he agree that the revitalisation of city centres such as that of Newcastle upon Tyne is heavily dependent upon private enterprise and the private sector, and that his answer will be welcomed in every major city?

Mr. Heseltine: I confirm the views of my hon. Friend. I am delighted that we are able to contribute towards the success of the urban programme in Newcastle upon Tyne and towards the enterprise zone opportunities which we have also brought there.

Mr. Hunt: I endorse what my right hon. Friend has said, but does he accept that involvement of the private sector in the membership of these committees would give a new and more commercial impetus to their work?

Mr. Heseltine: I have considered the point put to me by my hon. Friend. However, I do not believe that involving the private sector in those committees would give a new momentum. The procedure which we have adopted will have a greater effect. It ensures that the private sector is deeply involved in the formative and consultative processes that lead to decisions on those programmes.

Mr. Alton: Will the Secretary of State reconsider his decision and consider involving not only the local chambers of commerce, particularly in the partnership committees, but the voluntary organisations, which feel that they are being excluded from the workings of partnership committees?

Mr. Heseltine: We want to secure the maximum involvement of the voluntary organisations. However that is difficult because of their large numbers. It is also difficult to have a process which genuinely involves them in decision-making. However, I am sympathetic to the role and scope for support in the voluntary sector.

Mr. Steen: Will the Minister explain what the logic is of excluding the private sector from joint enterprises, when public/private partnership is at the root of urban revitalisation?

Mr. Heseltine: If I have given that impression to my hon. Friend, I want to remove it at once. When we took


over responsibility for the urban programme, there was no effective involvement of the private sector. We have now ensured that future decisions about the scale and scope of the programme will be conditional upon consultation with the private sector.

Mr. Robert C. Brown: Does not the Secretary of State recognise that membership of the partnership committees does not matter a tuppenny damn but that what matters his recognition of the problems of the inner cities and facing up to them?

Mr. Heseltine: I do not think I would use the precise words used by the hon. Gentleman. Perhaps the flavour of what I was saying was not far away from the point he made. It is precisely because we realise the need for a public/private sector commitment to the inner cities that we are pursuing our present policies.

Government Properties (Disposal Procedure)

Mr. Kenneth Marks: asked the Secretary of State for the Environment what changes have occured in the instructions given to the Property Services Agency about the disposal of airfields and other Government properties since May 1979.

The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): My right hon. Friend stated on 13 June 1979 that surplus land should be offered for sale as soon as practicable and abolished the procedure whereby surplus Government land had first to be offered to other public authorities.
We published last September proposals for widening the scope for offering back surplus property to former owners, and expect shortly to announce the outcome of consultations on those proposals. The Property Services Agency has been acting on these proposals during the period of consultation.

Mr. Marks: That came early after the election. If the purpose was to reduce the public sector borrowing requirement, why was Wisley airfield sold in such indecent haste to Lord Lytton at an agricultural price, when an appeal had been lodged which, if successful, would have raised the value of the land from a few hundred thousand pounds to several million pounds? Was that at the instruction of the Secretary of State?

Mr. Finsberg: I gave a full explanation in my reply to an Adjournment debate on 24 July 1980 of the circumstances which surrounded the sale of that property to the successor of the former owner. Since that time, my hon. Friend the Member for Dorking (Mr. Wickenden) has referred the matter to the Parliamentary Commissioner for Administration, and a planning appeal is in train. Therefore, it would not be appropriate for me to comment in detail at this stage.

Sir Albert Costain: Is the Minister aware that there are a number of Service personnel about to retire and living in houses outside the county who would like to purchase their houses? Will my hon. Friend facilitate that?

Mr. Finsberg: If my hon. Friend would care to send me details, I should be glad to consider those cases.

Mr. Arthur Lewis: Everyone knows—except probably the Minister—that the forerunner of this organisation has lost hundreds of millions of pounds. Is he aware that

the so-called investigation now going on will again cost millions of pounds, mainly going to the very highly paid lawyers who come up with condemnations, but no action will be taken? Can the Minister guarantee that some of these people will be sacked for the way in which they have milked the taxpayer of hundreds of millions of pounds?

Mr. Finsberg: Unlike the hon. Gentleman, I have no intention of prejudging the case.

Mr. John Wells: As it is well known that municipal airfields all lose money, will my hon. Friend take steps to persuade or coerce Kent county council to dispose of the disused West Mailing airport and not to waste the Kentish ratepayers' money in trying to bring it back into unwanted and unwarranted service?

Mr. Finsberg: That supplementary question does not arise from this question. However, I shall draw it to the attention of my appropriate hon. Friend.

Building Regulations

Mrs. Reńee Short: asked the Secretary of State for the Environment when he intends to publish a Green Paper on the administration of the building regulations.

Mr. Stanley: My right hon. Friend expects to publish a Command Paper by the end of this month.

Mrs. Renée Short: That answer will be welcomed by everyone. However, can the Minister give an indication on how he intends to enforce the regulations, bearing in mind that there could be complications if responsibility is given to private organisations and taken away from local authorities?

Mr. Stanley: As the hon. Lady will understand, I cannot anticipate the proposal which will come forward in the Command Paper. However, I assure her that while we wish to see and explore the possibility of a significant measure of self-regulation by the building and construction industry in this area, we also see a continuing important role for local authorities.

Mr. Latham: Is my hon. Friend aware that it is nearly 14 months since the Secretary of State spoke to the National House Building Council and launched the consultation process on this matter? Are we not past the stage of Green Papers? Should not we be getting on with decisions and action?

Mr. Stanley: My hon. Friend will see from the answer which I have given that I referred to a Command Paper, which denotes something between a Green Paper and a White Paper. I assure him that we shall want to combine some specific proposals with elements of this new scheme, which we wish to expose to further consultation.

Mr. Edwin Wainwright: Will the Minister take into account that no matter what kind of building regulations we have, some builders will build faulty houses, even for owner-occupiers? There have been two such cases in my constituency. Will the Minister ensure that builders who build faulty houses and go into liquidation must, before being allowed to build, put money into a special fund so that owner-occupiers will be compensated if necessary and not be dependent on local government?

Mr. Stanley: As the hon. Member will be aware, extensive cover is provided through the NHBC guarantee


scheme. As building societies will not normally advance, except on properties covered by that scheme, virtually all new building falls within the scope of that scheme.

Mr. Chapman: As well as dealing, it is to be hoped, with matters relating to unifying and simplifying the building regulations, will the Command Paper include the crucial matter of dealing with the law of liability which is overdue since the Anns v. Merton case?

Mr. Stanley: My hon. Friend will be aware that my noble Friend the Lord Chancellor has specific responsibility for reviewing the law in this area. I assure my hon. Friend that the issue of liability and indemnity, which is one of the central questions involved in any change of the existing system of building control, will be covered in the proposals that we want to put forward.

Housing Corporation

Mr. Bowden: asked the Secretary of State for the Environment when next he expects to meet the chairman of the Housing Corporation to discuss the level of grants to housing associations for 1981–82.

Mr. Stanley: My right hon. Friend announced on 15 December that the Housing Corporation would receive £491 million in 1981–82 for distribution to housing associations. I expect to receive the Housing Corporation's formal programme for approval very shortly and will be discussing it with the corporation's chairman.

Mr. Bowden: Will the Minister confirm that the Secretary of State has undertaken to make additional funds available for the frail elderly? On the next occasion that he meets the chairman of the corporation, will he tell him how much extra money will be available to ensure that this group and the disabled get special help?

Mr. Stanley: I think that my hon. Friend is referring to the specific increased allocation of £12 million for 1981–82, which is to be spent on the provision of additonal hostel accommodation by the Housing Corporation. Detailed decisions on which schemes will be covered by that allocation of £12 million are for the Housing Corporation, but I expect that some of it will be devoted to schemes for the elderly.

Mr. James A. Dunn: Will the Minister make a statement very soon about his intention to allocate the £12 million for the housing of the single homeless, because some housing associations have difficulty in understanding his proposals in that regard?

Mr. Stanley: As I have said to my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden), the detailed allocation of the £12 million for special needs hostels will be a matter for the Housing Corporation. As I have also said in reply to the hon. Member for Isle of Wight (Mr. Ross), I assure the House that that sum will not be concentrated solely on London. There will be a regional distribution, and that will be a matter for the Housing Corporation.

Mr. Durant: Will my hon. Friend discuss with the chairman of the Housing Corporation the discrepancy between the numbers of acquisitions and completions by the Housing Corporation? Will he further discuss whether it is necessary to have the double scrutiny that takes place now between the DOE and the Housing Corporation?

Mr. Stanley: There is a substantial discrepancy between the numbers of properties acquired and their completion. That discrepancy has continued over many years. The Housing Corporation is in the process of examining whether schemes which have been acquired and approved to be acquired previously are likely to go ahead in the near future and whether there is any scope for reducing the number of schemes in the pipeline in that way.
From 1 April this year we shall be introducing a new system of single scrutiny exclusively by the Housing Corporation for housing association projects. I think that will substantially improve progress with housing association projects.

Mr. Pavitt: When discussing these matters with the chairman of the Housing Corporation, will the Minister place some emphasis on the co-operative form of housing association and the way in which development there has been almost arrested in the last year? At the same time, will he make a statement about his staircase policy and how that fits into the management of a housing association by the tenants?

Mr. Stanley: The hon. Gentleman will be aware that there is a variety of co-operative forms of housing associations. Neither the Housing Corporation nor the Department makes any distinction between the approval of schemes of normally constituted housing associations and co-operative housing associations. They are treated on the same basis.

Rate Support Grant

Mr. Adley: asked the Secretary of State for the Environment if he will list, in order of priority, the criteria he has established to determine the level of rate support grant; if coastal erosion is on the list; and, if not, whether he will include it next year.

Mr. King: I refer my hon. Friend to annex J of "The Rate Support Grant Report (England) 1980" for the indicators used in the calculation of grant-related expenditure. It is not possible to list those in order of priority. An indicator relating to expenditure on coast protection is included.

Mr. Adley: Does my right Friend agree that expenditure on coastal erosion should nevertheless qualify as essential rather than desirable expenditure? Does he accept the principle that if a bit of England falls into the sea, England should pay?

Mr. King: My hon. Friend will be able to pursue his arguments on this point more effectively under the new system than under the previous system, under which it would have been impossible to know what sums of money were effectively allocated for this purpose or the basis on which they were distributed. I am not satisfied with the present system, but it is the best that could be introduced this year. Owing to the lack of adequate statistics on coastal erosion, it does not take that factor as fully into account as I would like. There is scope for improvement. I hope that my hon. Friend will be able to make constructive suggestions as to how this might be handled.

Mr. Cryer: Whatever the criteria for the rate support grant, is it not a fact that the Department of the Environment is cutting back? Where is the sense in cutting


back the rate support grant, forcing local authorities to cut back in both the private and public sectors, and simply transferring money to the Department of Employment in larger payouts on lengthening dole queues? It is crazy economics and it makes nonsense for those joining the dole queues.

Mr. King: The numbers who join the dole queues will be very much influenced by the attitudes of local authorities to the levels of the rating bills that they face.
In that connection, I should think that the hon. Gentleman is thanking his lucky stars that his constituency is in West Yorkshire, which has decided to make a 25 per cent. reduction in its rates, has cut its bus subsidy completely and has managed to freeze fares for the next 17 months. However, I understand that South Yorkshire which is a Labour-controlled county council, proposes to spend no less than £65 million on subsidising bus fares with the result that industrialists in that area will face a 42 per cent. rate increase.

Urban Programme

Mr. Freud: asked the Secretary of State for the Environment what criteria guide him in giving grant aid to a district council that applies to him under the urban programme Circular No. 21.

Mr. King: The criteria are set out in the circular. Generally, all projects should operate in or for the benefit of urban areas where there is special social need, and aim to alleviate the deprivation identified in that area.

Mr. Freud: I am grateful to the Minister for that reply. Will he bear in mind that the Fenland district council, which wrote to him, now has a much worse situation than at the time of writing? With the closure of Smedleys, the second largest employer in north Cambridgeshire, the position needs all the sympathy that the right hon. Gentleman can give to it.

Mr. King: I am aware of the difficult situation in Wisbech as a result of the announcement of that closure and the problems that the hon. Gentleman has rightly raised in the House. We shall not be able to make an announcement on the urban programme grants until early April. However, the hon. Gentleman will have noticed the announcement that I made yesterday about the improved arrangements for COSIRA, which is active in his constituency. I am sure that the whole House will welcome the new arrangements under which COSIRA in the SIA areas will now be able to be a lender of last resort, and will operate schemes for fifty-fifty workshops in conjunction with local authorities in those areas, which we believe will help to provide employment in such areas.

Mr. Foster: Will the Minister assure the House that any district council which, through the urban programme circular, funds citizens' rights centres and neighbourhood advice centres will not subsequently have that funding removed on pseudo-political grounds as his noble Friend has recently done in Sunderland?

Mr. King: We believe that such advice centres should be genuinely operated for the service of the people in the area, not on a party political basis for propaganda and other purposes. We shall stick closely to the guidelines that were laid down by the Labour Government and by the

Labour Lord Chancellor who said that such advice centres should not be used for political purposes. We intend to see that that is implemented.

Housing Subsidies

Miss Wright: asked the Secretary of State for the Environment what effect the present moratorium on new council house building has on housing subsidies payable in the current year under section 2 of the Housing Rents and Subsidies Act 1975; and whether any decrease in subsidies will be carried over in the calculation of the base amount of housing subsidies for 1981–82 payable under section 98 (1)(b) of the Housing Act 1980.

Mr. Stanley: The only subsidy effect of the moratorium has been to avoid payments being incurred on capital expenditure in excess of the national cash limit. The base amount for subsidy under the new subsidy system beginning on 1 April is the amount of subsidy payable in respect of 1980–81.

Miss Wright: Is the Minister conceding that the moratorium on building basically means that there has been no new capital costs subsidy earned during this period and that, as a result, there will be an artificially low level of subsidy incorporated in next year's base amount, or is he saying—I am not clear—that it will not take into account the lower capital costs subsidy which is clearly going to local authorities as a result of the moratorium?

Mr. Stanley: I assure the hon. Lady that subsidy is still being paid on projects that are in the process of construction and completion now. Those subsidies have continued since the moratorium started. The only effect of the moratorium is to try to ensure that the national cash limit that was previously agreed is adhered to for 1980–81. I do not accept the hon. Lady's view that there has been an artificial reduction in the amount of subsidy. We are simply trying to keep the level of expenditure down to the level that was originally announced.

Mr. Kaufman: Will the Minister come completely clean on this matter? Is he aware that the Government have stopped local authority housing programmes in their tracks for nearly six months? Will he now make clear to the House whether, in addition to that, he is now pinching subsidy from those local authorities as a result of his preventing them from incurring capital costs?

Mr. Stanley: I assure the right hon. Gentleman that there is no question of any subsidy being pinched. The rules on subsidies have remained unchanged. I hope that the right hon. Gentleman will be prepared to recognise that, as a result of the changes that we made with the introduction of a new system, there will be a number of significant items of expenditure that will be admissible for subsidy for the first time from 1 April.

Mr. Kaufman: Is the Minister aware that we need to get this matter absolutely clear? Is he further aware that under section 92 of the Act it is perfectly clear that the subsidy for the next financial year is very much affected by the base amount? May I ask the Minister to make clear to the hundreds of local authorities that are affected and want to know their subsidy entitlement whether the depression of the base amount caused by the moratorium will mean that they will lose subsidy in the coming financial year?

Mr. Stanley: The subsidy rules applying to this current financial year are wholly unchanged.

New Towns (Public Expenditure)

Mr. Murphy: asked the Secretary of State for the Environment what priority the Government are giving to the public expenditure in the new towns as against investment in the inner urban areas.

Mr. Heseltine: As the new towns programme reaches completion the level of public investment is bound to decline. Our new initiatives in the inner cities will increase the level of public investment there. Expenditure in both areas has, however, to be considered in the light of available resources and demands from elsewhere. There are no precise formulae for measuring the relative priorities.

Mr. Murphy: Does my right hon. Friend agree that the speedy winding up of the new towns commission and the new towns corporations would help to free a large amount of public expenditure, which could then be used for urban renewal?

Mr. Heseltine: I shall with permission, Mr. Speaker, make a further statement about that later this afternoon. If we do not spend so much public money on the new towns, resources will be available for expenditure elsewhere. However, it does not follow that savings in the new towns would flow into the inner urban areas.

Mr. Newens: Has not the right hon. Gentleman discriminated against new towns, in that he has applied a rate support settlement to them which in many cases has deprived them of the necessary funds and housing subsidies? Is he aware that to date he has postponed and refused to reach a settlement on section 10 grant matters, which means that many of the new towns are unable to deal with the problems of maintenance and design defects of the houses which were passed on to them by the development corporation? Is that not a matter about which he should be ashamed?

Mr. Heseltine: The hon. Gentleman will be pleased to know that a meeting will be conducted by my hon. Friend the Under-Secretary of State in about two weeks to discuss the precise problems to which the hon. Gentleman referred. I would not in any way accept the criticisms implied in his question about the rate support grant. We have simply reallocated to other authorities whose cases, on the measure of an independent basis of analysis, seemed to be more critical than those of the authorities that lost grants.

Local Authorities (Statutory Duties)

Mr. Bob Dunn: asked the Secretary of State for the Environment what guidance has been given to councilors regarding the extent of local authorities' statutory duties.

Mr. King: Although we do not issue guidance to councillors as a matter of course, we seek to respond helpfully to specific requests. Generally, the responsibility for advising councillors on these matters rests with their officers.

Mr. Dunn: Is my right hon. Friend aware that in many local authorities officers lead councillors to believe that they have a statutory responsibility, whereas sometimes

the councillors could exercise discretion? Would it not be a good idea to publish a code of responsibility so that councillors know in which areas they could exercise discretion and those in which they have statutory responsibilities?

Mr. King: As my hon. Friend is aware, we have been reviewing the range of statutory duties. In the Local Government, Planning and Land Act we removed about 300 controls and duties that were applicable to local authorities. At present we are having discussions with the associations on the further review that has been conducted on statutory duties. On completion of those discussions, we may find that there is some good sense in my hon. Friend's proposition.

Mr. Skinner: Is it not a fact that local authorities have a statutory duty to ensure that there are sufficient houses fit for human habitation under the Public Health Act? Is not the Minister aware that the policy of the Government in running down housing completions to the lowest figure since the 1920s is an attempt to stop councils from carrying out their statutory duty to ensure that people have decent homes?

Mr. King: I imagine that the Labour Government had that statutory duty in mind when they halved the housing programme.

Rate Support Grant

Mr. John Hunt: asked the Secretary of State for the Environment what representations he has received regarding the effect of the rate support grant settlement on the London borough of Bromley.

Mr. King: My hon. Friend has written to me on this subject. I have also received a letter from my hon. Friend the Member for Chiselhurst (Mr. Sims), and my Department is engaged in correspondence with the borough council on a detailed aspect of the calculation of block grant.

Mr. Hunt: Is my right hon. Friend aware that Bromley has a long and proud tradition of prudent housekeeping and steady rate levels? Is he further aware that because of his rate support grant settlement there is now talk of a 30 per cent. rate increase next year? Should not local councils which have always followed sound Conservative policies be rewarded and encouraged, rather than penalised in this way?

Mr. King: As I sought to explain to the House earlier, there is a problem for London this year. In previous years its share of grant has increased from 13·3 per cent. to 17 per cent. of the national share. That means that other authorities in different parts of the country had their share correspondingly diminished. On an assessment of need, we thought that the shift of grant was excessive. That resulted in a shift back of the grant. The grant for London is still at a high level in historic terms, but I appreciate that this year it poses problems for a number of London authorities. I recognise the difficulties of Bromley, and I note the remarks of my hon. Friend about the efforts that it has made to economise in the past.

Mr. Speaker: I regard that as a constituency question.

Local Authorities (Land Disposal)

Mr. Latham: asked the Secretary of State for the Environment what progress is being made by local authorities in disposing of land which they bought under the Community Land Act.

The Under-Secretary of State for the Environment (Mr. Giles Shaw): Information on such disposals is no longer being collected as the remaining sites have now been merged with the general land holdings of local authorities. We are urging authorities to dispose of land suitable for private development.

Mr. Latham: Is my hon. Friend aware that the local authorities bought a lot of land under the Community Land Act but resold hardly any? Is he further aware that the process of resale that was required under the Act should be carefully monitored by his Department to ensure that the land is sold?

Mr. Shaw: I fully accept my hon. Friend's view that we must do everything possible to persuade and urge local authorities to dispose of land that is suitable for private development. I shall bear his point in mind.

Mr. Skinner: Will the Minister tell his hon. Friend and others that, although they are now complaining that the Community Land Act resulted in land being bought, only a few years ago people such as the Minister and most of his colleagues on the Tory Front Bench said that the Community Land Act should be scrapped because it was not doing any good and land was not being purchased?

Mr. Shaw: The hon. Gentleman must recognise that the sheer costs involved in the transaction have shown a poor return on the money spent.

Disabled Persons

Sir David Price: asked the Secretary of State for the Environment, in view of the fact that 1981 is the International Year of Disabled People, whether he will sponsor a conference on designing for the disabled.

Mr. Geoffrey Finsberg: I have no plans to sponsor a conference, but my Department is undertaking a wide range of measures, some of which cover designing for the disabled, in connection with the International Year of Disabled People. These were set out in the reply given by my right hon. Friend to the right hon. Member for Manchester, Wythenshawe (Mr. Morris) and the hon. Member for Caernarvon (Mr. Wigley) on 19 January.

Sir David Price: Is my hon. Friend aware that, in spite of the Chronically Sick and Disabled Persons Act, many buildings are still being constructed in this country in which the access for handicapped people is inadequate, to say the least? Is he further aware that many of those buildings are in the public sector? Does he not agree that the time has come for the Minister and his right hon. and hon. Friends to act at least catalytically with local authorities, public bodies and private builders to try to get it right? Is he aware that the technical knowledge is there, but there is a lack of action?

Mr. Finsberg: My hon. Friend will be aware that we are commissioning a film on housing for the disabled, in order to demonstrate what can be done. [Interruption.] Perhaps there should be a little less levity on a matter which causes deep concern to many of us. There is clearly

a need for new initiatives, especially involving the private sector. I hope that the film will stimulate interest among private developers as well as local authorities and housing associations.

Mr. Carter-Jones: Will the hon. Gentleman make sure that the disabled will be able to get access to the film? Will he show an earnest of his intent by supporting a Private Member's Bill on the subject of access, supported by hon. Members in all parts of the House? Will he please now give a firm undertaking that he will not oppose the Second Reading, and give us a chance to discuss the matter in this Chamber and upstairs?

Mr. Finsberg: The hon. Gentleman should be aware that my Department is specifically interested in trying to get a proper focus on housing for disabled people. That is why we have joined with the Royal Institute of British Architects and with the National House Building Council to have a special focus on housing for disabled people by means of a design award.

Mr. Michael Morris: Should it not now be mandatory for every public building to have adequate access for the disabled? If we took that action alone, it would be a significant step forward.

Mr. Finsberg: I accept what my hon. Friend says, and I believe that the overwhelming majority of public buildings constructed over the past decade or so have the provision for which he is asking. It is much more difficult to conjure out of the air access to buildings that have already been built. I recall that Labour Members were not saying this when their party was in office.

Mr. John Home-Robertson: Will the Minister stop havering about conferences and films and give the House a clear undertaking that he will take administrative—and, if necessary, legislative—action to ensure that there is proper access for disabled people, particularly those in wheelchairs, into all public buildings?

Mr. Finsberg: I covered that point in the last answer.

Homes Insulation Scheme

Mr. Kenneth Carlisle: asked the Secretary of State for the Environment if he is satisfied with the level of grant take-up under the Government's homes insulation scheme.

Mr. Geoffrey Finsberg: The take-up of allocations varies from district to district, but we expect a much higher level of take-up nationally in 1980–81 than in the first two years of the scheme, when only 44 per cent. and 56 per cent. of the large sums allocated for the homes insulation scheme were spent.

Mr. Carlisle: I thank my hon. Friend for that answer, but will he tell us what proportion of the insulation grants will go to the elderly and disabled? Is he satisfied with the take-up by these groups of people? If not, what will he do to improve the take-up?

Mr. Finsberg: My hon. Friend will know that the special scheme for the elderly was recently introduced only, and it is too early to give the House any proper detail. All I can say is that, from the evidence that we have from all over the country, the majority of local authorities still have funds available for this special category.

Mr. Alton: Will the Minister accept that a great deal of money is being wasted by heat being pumped into


people's homes and going out through the roof because of inadequate insulation? Will he also agree that there is a need to use many of our unemployed building workers by embarking on a scheme that would be. not only environmentally desirable but also economically advantageous?

Mr. Finsberg: I have to remind the House that a massive amount of progress has been made with regard to uninsulated roofs since the schemes were first introduced and supported on each side of the House. If the hon. Gentleman is talking about something like topping up, I can only say that the cost-effective benefit of insulation comes in the first amount and not in topping up.

Mr. Watson: Will my hon. Friend ensure that adequate publicity is given to the availability of insulation grants, particularly bearing in mind that the funds available for those grants next year will be a full 30 per cent. greater in real terms than is the case at present?

Mr. Finsberg: I shall do my best to make everybody aware of the benefit that people will get to their own pockets from insulation, apart from any grants which may help them.

Rate Support Grant

Mr. Beith: asked the Secretary of State for the Environment what representations he has received from the council of the borough of Berwick-upon-Tweed about the effects on it of the rate support grant settlement.

Mr. King: I have received a letter from the mayor.

Mr. Beith: Will the Minister explain why the council of the borough of Berwick is threatened with penalty under the rate support grant system if it does not raise its council house rents, not by £3 a week as in other areas but by £5 a week, bearing in mind that it has not been making subsidies to council house rents out of its rate funds? Why should good housekeeping be penalised, and why should the tenants in Berwick-upon-Tweed have to pay that increase?

Mr. King: This issue is concerned with the sharing out of grant. It is a matter of how to distribute a fixed sum of grant. The hon. Gentleman's proposition is that more grant should go to the authorities charging lower rents than to those charging higher rents. If he thinks the matter through, he will see the logic in the distribution formula that was adopted.

Local Authority Manpower

Mr. Norman Atkinson: asked the Secretary of State for the Environment if he is satisfied that the increased net cost to the Exchequer of cutting local authority staff is in line with the Chancellor's criteria for reducing the public sector borrowig requirement.

Mr. Heseltine: Under present policies on local authority current and capital expenditure, there will not be any net cost to the Exchequer of cutting local authority staff. On the contrary, there will be a net gain to public funds leading to a reduction in the PSBR in line with the Chancellor's objectives.

Mr. Atkinson: Will the Secretary of State reconsider that reply in the light of the experience of, say, the London borough of Haringey? If that council had carried out the

recommendations made by the Secretary of State, it would have sacked about 3,800 members of its work force, at a total cost of about £16½ million to the Exchequer, assuming that those displaced people would not get other employment. Is that not in excess of the saving for which he is looking from the London borough of Haringey? Would it not therefore be a net cost to the Chancellor of the Exchequer?

Mr. Heseltine: The hon. Member completely fails to take into account what the damage will be in terms of rising unemployment if that authority imposes on the private sector the level of rate increase that it characteristically imposes.

Mr. Latham: Is my right hon. Friend aware that the county of Leicestershire, although it has had its rate support grant reduced this year, has nevertheless managed to restrain its proposed rate increase to only 4 per cent., and that this is a marvellous effort in the interests of business and other ratepayers.

Mr. Heseltine: I am sure that the response from the private sector as a result will be totally different from that which is achieved in the London borough of Haringey.

River Thames

Mr. Jessel: asked the Secretary of State for the Environment if he will take steps to protect the environment of the River Thames in 1981.

Mr. Heseltine: I shall continue to use the powers available to me to try to improve the quality of development near the River Thames in London.

Mr. Jessel: Will my right hon. Friend accept that the River Thames at and near Twickenham is an asset that is very highly valued by the community, with its views, its parks and its trees? Will he ensure that it is the policy of his Department to stop the construction of any large or ugly buildings along the river banks?

Mr. Heseltine: I must not talk in detail about particular proposals which might prejudice my quasi-judicial position on planning matters, but in general terms I have as a high priority the raising of the quality of architecture for development on Thamesside.

Mr. Spearing: Will the Secretary of State accept that in the dockland area of London many of the inhabitants believe that the environment should be protected from the urban development corporation and from the powers of the Secretary of State? Will he confirm that if the urban development corporation is established in London dockland, he will direct its officers to secure the full co-operation of the boroughs, and that he will do everything to ensure that that is provided by them by their free will?

Mr. Heseltine: I am sure that the hon. Member appreciates that this matter is now being considered in another place, and that it will be considered again in this House. It would be wrong for me to follow him down the line of potential controversy when what I now seek is a far better deal for the people living in that area.

Town and Country Planning Legislation

Mr. Chapman: asked the Secretary of State for the Environment if he is satisfied that the existing town and country planning legislation, including the development


control system and relevant structure plans, is adequate to protect the countryside generally, and good agricultural land in particular, from the pressure for industrial, commercial and residential development in the vicinity of the M25 London orbital motorway.

Mr. Giles Shaw: Yes, Sir.

Mr. Chapman: I am only partially reassured by that answer. Recognising that there will be unique pressure on

land because of this motorway, is my hon. Friend prepared to ask his right hon. Friend to call in any planning application that is contrary to an approved structure plan to which a local planning authority is minded to grant permission?

Mr. Shaw: As my hon. Friend will know, I cannot comment in detail on the plans now being called for in a public inquiry in relation to motorway development.

New Towns

The following questions stood upon the Order Paper:

Mr. Warren Hawksley: To ask the Secretary of State for the Environment, if he will now make a statement on the future of the third-generation new towns.

Mr. Den Dover: To ask the Secretary of State for the Environment, when he now expects to be in a position to make a statement on his policy towards the third-generation new towns.

Dr. Brian Mawhinney: To ask the Secretary of State for the Environment, if he will now make a statement on his policy for the third-generation new towns.

The Secretary of State for the Environment (Mr. Michael Heseltine): I have now completed my examination of the third-generation new towns. In all six new towns the development corporations will be expected to rely substantially on private sector investment. Public sector funding will be restricted to the minimum needed to support further growth.
In the cases of Northampton and Central Lancashire new towns, the Government consider that the aim should be to wind up the development corporations on 31 December 1984 and 31 December 1985 respectively. By these dates the population of Northampton should be of the order of 170,000 and that of the designated area of Central Lancashire new town about 270,000. I shall be consulting the local authorities concerned about the implications for them of these target dates.
The development corporations of the other four new towns should be wound up in the late 1980s. By this time the population of Milton Keynes is likely to be of the order of 150,000; that of Peterborough 150,000; that of Telford 130,000; and that of Warrington 160,000.
All these figures should not, however, be considered as targets. The rate of population growth will depend essentially on the rate of demand for private house building and the willingness of the private sector to invest.

Mr. Hawksley: I thank my right hon. Friend for that answer. I hope, in particular, that it will reassure local authorities who have been perturbed and have suffered a loss of morale because of the delay. Has the Secretary of State any proposal to smooth over and to prepare for the eventual changeover to local authority responsibility of those services which are run, at the moment, by the new towns, particularly in Telford, where the life of the new town is being extended? One hopes that what my right hon. Friend said confirms that the figures will remain the same.

Mr. Heseltine: I am grateful for my hon. Friend's support. I have no reason to suppose that there will be any difficulties. There is a perfectly well precedented, mechanical process by which all this is brought about. If, however, I felt that it was not working as I would hope, I would be prepared to enter into discussions with the appropriate bodies to see what it was necessary to do.

Mr. Dover: Will the Secretary of State accept that the people of central Lancashire greatly welcome the announcement of a date for the winding up of the Central Lancashire new town? They will also welcome the move towards private housing, rather than having so much

rented housing. Will my right hon. Friend assure the House that he will allow only natural population growth and not induced population growth?

Mr. Heseltine: I am grateful to my hon. Friend. It is our intention to rely on natural population growth and natural investment from the private sector. I have tried to set the figures bearing in mind what is likely to emerge in the course of the years that lie ahead.

Dr. Mawhinney: I also welcome the statement made by my right hon. Friend. I should like to put two questions relating to Peterborough new town. My right hon. friend said that there would be a reduction in the amount of private investment. Will he give an assurance that this relates only to population movement and that investment necessary to provide factories and employment will be maintained at the current level?
Will my right hon. Friend bear in mind that because health care provision was not included in the New Towns Act, all the third-generation new towns have suffered health care provision inadequacies? Will he undertake to consult his right hon. Friend the Secretary of State for Social Services to make clear to him that nothing in this statement should jeopardise the building of the second district hospital in Peterborough, which is not only overdue but is badly needed?

Mr. Heseltine: I am grateful to my hon. Friend. He will appreciate that his second question is a matter for my right hon. Friend the Secretary of State for Social Services. I shall ensure that my right hon. Friend is made aware of the concern that my hon. Friend expressed.
In his first question, if I understood him correctly, my hon. Friend was talking of the consequences of the reduction in public investment. It is my view that there will be a reduction in public investment. It will be set at a point that is sufficient to provide the basic infrastructure and to maintain the growth along the levels that I have indicated but not at a higher level.

Mr. Stanley Newens: Does the right hon. Gentleman recognise that the district councils will be faced by all sorts of problems that they have neither the resources nor the powers to tackle? What will he do to avoid the same pattern of procrastination in dealing with the problems faced by these district councils that has characterised his dealings with the district councils in the first-generation new towns, where section 10 grant claims are still not settled despite the period that has elapsed since the handover of the houses?

Mr. Heseltine: I am sure that the hon. Gentleman, who has a deep concern in these matters, will realise that we have had to take over what we inherited from the Government whom we replaced. I do not think that he would want to draw too many conclusions about the state of affairs that we found. It would be my intention to proceed in what is the normal way in the transfer of assets from one public sector body to another by discussion and negotiation. I have no reason to suppose that we cannot resolve the difficulty to which the hon. Gentleman draws our attention.

Mr. Michael Morris: Does my right hon. Friend recognise that the terminal date for Northampton will be greatly welcomed? Will he ensure that any surplus land assets are monitored by his Department to make sure that they are automatically


transferred to either county or district councils? Will he ensure that if there are any abnormal costs arising out of some of the infrastructure, care will be taken to ensure that the whole burden does not fall upon local ratepayers?

Mr. Heseltine: I am grateful to my hon. Friend. Abnormal costs and non-recurring costs are issues that we must discuss when we decide the precise mechanics of the transfer. On the question of land, I hope that before we reach the point at which these transfers take place, particularly in the Northamptonshire case that my hon. Friend mentions, we will have moved a long way in dealing with public sector land holdings on a comprehensive basis and not just within the new towns. We have already designated 33 land register areas where all public sector land that is under-used has to be registered if it is over 1 acre. I am now working on proposals whereby the existence of all under-used local authority land over a certain acreage is made known to those people living in each community. We shall therefore have a far greater awareness of land holdings in the public sector long before Northampton is transferred.

Mr. John Evans: Is the Secretary of State aware that the part of the announcement that I welcome is the fact that Warrington new town will not be wound up until the late 1980s, by which time we shall have got rid of this Government? Will the right hon. Gentleman confirm that the reason for the tremendous success of Warrington new town has been the excellent balance between private investment and public investment? The fact that he is cutting back heavily on public investment jeopardises the future of Warrington new town.
Now that the right hon. Gentleman has announced the amalgamation of Runcorn with Warrington new town, will his announcement affect the Runcorn aspect of Warrington new town?

Mr. Heseltine: The hon. Gentleman asked me three questions. The Runcorn situation is not affected by what I have said. The position is as it was before I made my announcement.
I accept that the new towns represent a balance between the public and the private sectors. All that I am doing in the policies that I am pursuing is to switch the balance to a greater reliance on private investment as opposed to public investment. One recognises that there is a balance to be struck.
I cannot disagree with the hon. Gentleman that the Government will not be in power when the transfer takes place in the late 1980s. It will, of course, be replaced by the next Conservative Administration.

Several Hon. Members rose—

Mr. Speaker: Order. I propose to call the hon. Members who have been rising, because I believe that they have constituency interests. However, I point out that this is an extension of Question Time.

Mr. Robert Atkins: Will my right hon. Friend accept that although we welcome the curtailment of the development of green field sites and the resale of the land back to agricultural use, there will be concern in Preston about the effect of the curtailment of the new town on the rehabilitation of the older parts of

Preston and the development of the former Courtaulds and Preston dock sites? Can he assure us that every assistance will continue to be given in those important areas?

Mr. Heseltine: I share my hon. Friend's concern. I want to be sure that our policies will enable the right and proper work to continue. Indeed, in my statement I said that I would consult the local authorities concerned about the implications of the target dates. The points that my hon. Friend makes will doubtless be put to me by them.

Mr. Derek Foster: Notwithstanding the Secretary of State's statement about the third-generation new towns, will he review his decision to terminate the Aycliffe development corporation by 1985? With unemployment in the surrounding areas running at about 15 per cent., does he accept that it represents the one chance of attracting new jobs to South-West Durham? Will he refrain from dissipating the industrial development expertise that has been gathered over the years?

Mr. Heseltine: I am afraid that I cannot reconsider. The announcements have been made about the first- and second-generation decisions. Unemployment is much more a matter for the central economic thrust of the Government's policies, and not for specific considerations when we wind up one or other of the new towns.

Mr. Christopher Murphy: Will my right hon. Friend confirm that the remaining public expenditure in the new towns will be concentrated on infrastructure and employment opportunities, leaving private investment to deal with housing?

Mr. Heseltine: That is very much in line with what I am proposing. Public expenditure will be used to create the infrastructure that will make possible programmes that can broadly follow from private sector house building and industrial investment.

Mr. Kenneth Lewis: Is my right hon. Friend aware that 3,000 acres of land was taken in my constituency to provide a massive reservoir to provide water for the Peterborough and Northampton new towns? Does he accept that as the expansion is not now to take place much of that water will be unnecessary? Will he therefore refund to the Anglian water authority some of the money spent, so that my constituents can have their water rate reduced? Will he also endeavour to make sure that over-provision of water does not occur again?

Mr. Heseltine: My hon. Friend's question does not immediately relate to whether we wind up the new towns on a given date, but we are sympathetic to such matters. If he wishes, we shall be happy to discuss them with him.

Mr. Gerald Kaufman: As the planned development of Milton Keynes new town is to be wound up well below the stage originally announced, have not the residents, businesses and industrialists been attracted there under false pretences? In view of the right hon. Gentleman's answers to the hon. Members for Peterborough (Dr. Mawhinney) and for Welwyn and Hatfield (Mr. Murphy), is it not clear that it is the Government's intention that the taxpayer should provide an infrastructure, through public investment, for a rip-off by property speculators?

Mr. Heseltine: It is fascinating to listen to the way in which the right hon. Gentleman describes policies pursued by his Government. Any idea that residents in new towns


are clamouring for new housing estates to be built alongside their houses does not accord with my experience. I am doing for the third-generation new towns what his right hon. Friend did for the first and second generation. We are marching along a road well precedented by the Labour Government. There is no reason to suppose that it will be any different for us than it was for them.

Mr. William Hamilton: On a point of order, Mr. Speaker. No doubt your attention will have been directed to the fact that the Secretary of State's statement is based on three inspired questions couched in identical terms from hon. Members on the Government Benches. It was followed by three supplementary questions from the Government Benches. That smacks to me of sharp practice. The practice is likely to increase if it is not stopped in its tracks. For instance, had there been six questions couched in identical terms, and had the Minister been allowed to make his statement in the way that he has today, would the six hon. Members asking the questions have been called one after the other? On the face of it, it is an abuse of the rules of the House. I ask you to make inquiries, Mr. Speaker, and if the practice turns out to be an abuse, to stop it.

Mr. Speaker: I considered the matter carefully before I came into the Chamber. The procedure has been very near to the making of a statement. However, the House can feel comforted by the fact that every hon. Member who wished to ask a question was called.

Mr. Dennis Skinner: Further to that point of order, Mr. Speaker—

Mr. Speaker: Order. The House is anxious to hear a statement from Mr. Secretary Carlisle.

Mr. Skinner: On a point of order, Mr. Speaker. You will recall that several years ago, during the term of office of the previous Tory Government, when the Department of Environment was headed by the fellow who is sometimes now in Europe, there had to be an inquiry about planted questions to establish what had taken place. This Tory Government do not appear to have learnt from past mistakes. It is high time that we had another inquiry. We need to teach these people a lesson.

Mr. Speaker: I do not remember what happened in that Administration. I was busy looking after Welsh affairs, and did not concern myself with English matters.

Dr. Mawhinney: Further to that point of order, Mr. Speaker. I ask for the protection of the Chair against the insinuations of the hon. Member for Fife, Central (Mr. Hamilton). The record will show that I have assiduously pursued the interests of my constituents. The Government's records will show that I have been pressing for a statement since last September. I resent and repudiate the hon. Gentleman's charges.

Mr. Arthur Lewis: Further to that point of order, Mr. Speaker—

Mr. Speaker: Order. I ask the hon. Gentleman to be as helpful as he can.

Mr. Lewis: I always am helpful, Mr. Speaker. We know that Governments of both parties sponsor questions. Questions are planted. May I suggest that when a Department does so it lets you know, so that you can

decide whether it is being done unfairly or properly, and whether you will call one, two, three, four or six hon. Members, or whether one from either side will be sufficient? The Department is supposed to be politically unbiased. If the Department wants to plant a question I cannot understand why it does not give one question to each side of the House, to make it fair.

Mr. Speaker: I am deeply grateful to the hon. Gentleman for his help.

Inner London Education Authority

The Secretary of State for Education and Science (Mr. Mark Carlisle): With permission, I wish to make a statement on the outcome of the Government's inquiry into the future of the Inner London Education Authority.
ILEA is the largest local education authority in England. Among such authorities its composition is unique. It precepts freely and without restraint on the ratepayers of the inner London boroughs and the City of London. In practice, it spends much more money per pupil than any other English authority without thereby achieving a satisfactory performance for many of its schools, particularly its secondary schools, as was shown in the HMI report on ILEA. The purpose of the inquiry was to see whether this situation could be improved by altering the constitutional arrangements for providing education in inner London.
The fundamental issue for the inquiry was whether ILEA should be broken up. There is a case for giving some responsibility for education to the inner London boroughs. There is also a case for retaining a single authority in the light of London's past development and its system of local government. But the overriding factors are educational and financial. The weight of educational opinion, including the voluntary bodies and the churches, is that the problems of inner London call for a single authority of adequate size and with adequate resources to administer its schools as well as further and higher education, and the careers service; and that responsibility for the schools should not be separated from the rest of education. The Government share that view.
This does not mean that the single authority has to be extravagant. That was one of the lessons to be learnt from the HMI report. The Government's public expenditure plans require local authority current expenditure on education in England to go down by about 7 per cent. in real terms between 1978–79 and 1981–82. ILEA has not made the response which could reasonably have been expected from an authority whose expenditure exceeds its needs by far more than any other education authority, on the basis of the assessment used for the distribution of block grant. It is apparently planning to spend next year almost as much in real terms as it did in 1978–79, although between 1978–79 and 1981–82 BLEA's pupil numbers will have fallen by some 13 per cent.
In that event ILEA would be likely to receive very little grant in 1981–82. The reason is simple. The block grant system ensures that an authority that acts irresponsibly cannot do so at the expense either of the taxpayers or of the ratepayers of authorities beyond its boundaries.
The long-term retention of the single education authority for inner London is justified only if the authority


shows that it can give the children and students of inner London a good service in all phases of education at an acceptable cost. It is up to ILEA to put its house in order. It must recognise that the right to precept entails the obligation to spend responsibly. If ILEA systematically abuses the rating system by unchecked extravagance, additional financial controls will be needed. The Government are now considering what further measures they would take to meet that situation.

Mr. Neil Kinnock: Does the Secretary of State accept that we, together with millions of parents, children, teachers and others concerned with education in London, are relieved by rather than grateful for this statement? Does he further accept that his announcement of the obvious and sensible was spoilt by the grudging and graceless way in which he made the statement and by the insults and threats that further disfigured it? Why was it necessary to go through the spurious exercise of the Baker report? Why was it necessary to make a desperate effort to find some way of justifying the Tories' prejudices against ILEA, which was the whole purpose of the Young report. Was it because of the power of a few Tory-controlled inner London boroughs that wanted to secede from their responsibility to fund education in London, or was it because of the Prime Minister's obsessive dislike for ILEA and her determination to break it up?
May I correct some of the deliberate misrepresentations that have occurred even in the right hon. and learned Gentleman's short statement? Is the Secretary of State aware that ILEA is not unique in its ability to make precepts? That is common to all education authorities. ILEA is unique only in the democratic respect that the boroughs have direct access to the education authority. [Interruption.] I have gote the statement in front of me. That is not what the Secretary of State said, or wrote, on previous occasions.
Is the right hon. and learned Gentleman aware that Her Majesty's Inspectorate commended many schools and teachers, and that it also commended many of ILEA's practices in schools and in other aspects of its educational provision? Why did not the right hon. and learned Gentleman see fit to echo that commendation in any of his statements? Does he think that any complaints that he might have about educational standards in ILEA will be lessened by the £200 million cuts that he wishes to make through the ridiculous system of the block grant?
Is the right hon. and learned Gentleman aware that, per pupil, expenditure in ILEA is higher because the needs of this vast city are greater than those in many other parts of the country? Does not the right hon. and learned Gentleman know that London has a greater burden to bear in terms of multi-racial educational requirements and social deprivation? Does he realise that London has a larger proportion of one-parent and transitory families, which necessitates extra attention being paid to educatonal expenditure? Does the right hon. and learned Gentleman live in the same never-never land as the person who dreamt up the block grant system and grant-related expenditure?
Much of the right hon. and learned Gentleman's statement concentrated on the block grant. Is he aware that ILEA has calculated that its needs for next year will amount to £694 million net of the effect of falling rolls? Does he think that the Government's calculation that ILEA

needs only £468 million—£226 million less—and that it can bear a 27 per cent. cut can be defended on any grounds? [Interruption.] In that case, ILEA has got it wrong. Indeed, the accountants, the chief executives and all the commentators who have made analyses of those figures have got it wrong. I suspect that the Secretary of State has got it hideously wrong, and he knows it.
How could that cut be defended? How could a cut of 27 per cent. be justified when falling rolls amount to only 13 per cent.? Even if we were to use the Government's figure of £598 million as the amount that could be allocated to ILEA, is the right hon. and learned Gentleman aware that ILEA would still lose £55 million on top of cuts of £96 million? In the words of the chief education officer and many others, ILEA could not even discharge its legal educational responsibilities.
Is the right hon. and learned Gentleman really saying that ILEA should be so hammered as to make it~ [Interruption.] I realise that Conservative Members do not like hearing the truth about one of their pet nostrums for the usefulness of ILEA, especially when it is becoming apparent that the nostrum is a load of superstitious nonsense. If the Secretary of State is lecturing ILEA about abuses and irresponsibility, how much more irresponsible would it be for it to fail to discharge its legal obligations?
The right hon. and learned Gentleman said in his statement
The long-term retention of the single education authority for inner London is justified only".
Is that a threat of a further prospect of disruption, instability and demoralisation for parents, teachers and pupils within ILEA?
Finally, when he asks ILEA to put its house in order, is he aware that but for the resistance of the Inner London Education Authority and its members to the cuts that the Government are imposing upon them it would be a question not of putting its house in order but of the demolition of education and standards of education in inner London as we know them and as we need to see them developed?

Mr. Carlisle: The hon. Gentleman has asked me a fair number of questions. I do not blame him for that. I shall do my best to answer them. I hope that he will forgive me if I do not answer all his questions completely. I shall try to deal with them in order.
First, the hon. Gentleman said that my statement included insults and prejudices towards inner London. I do not accept that. The concern that existed in inner London, especially about its expenditure and the nature of its education performance in certain areas, was recognised, or should have been, in an area far wider than these Benches. To say that we are being merely insulting and prejudiced ignores the genuine concern felt by many thousands of parents in the inner London area.
Secondly, the hon. Gentleman asked me why we decided to set up an internal Government inquiry into the working of the Inner London Education Authority. The reasons were twofold. First, the inquiry was a response to the concern that from time to time has been expressed about inner London. It was carried out to ascertain whether the composition of ILEA could be improved in a way that would affect those concerned. Secondly, I remind the hon. Gentleman that the 1963 Act, which set up ILEA, proposed that the authority should be reviewed at the end of 10 years. It was the Labour Party that chose to change


that statutory proposal. We believed that it was right to carry out the review that the London Government Act originally proposed.
The hon. Gentleman accused me of inaccuracies. He said that I said in my statement that the Inner London Education Authority was unique in that it had the right to precept and that I should know that every authority has that right. If he had read my statement, he would have realised that I said exactly the reverse. I said that ILEA was unique—he went on to admit this—in its composition. That is clearly so, and that is what my statement said.
I have rather lost the purport of the hon. Gentleman's next question He asked a question that I cannot remember in detail about the report of Her Majesty's Inspectorate. Anybody reading that statement would recognise that, while it pays tribute to the standards of the Inner London Education Authority in further and higher education, it is somewhat critical of special schools, it is critical in part of primary schools, and it is certainly critical of the performance in secondary schools. Those who represent those who ran ILEA do them no good by ignoring the criticisms that have been made. The greatest help that the hon. Gentleman could give to the children of inner London would be to support the report of Her Majesty's Inspectorate and to encourage those who run ILEA to learn the messages in the report.
The hon. Gentleman turned to expenditure. As I understand his argument, he contends that inner London is not really very expensive compared with other areas——

Mr. Kinnock: I did not say that.

Mr. Carlisle: —because it has greater social needs. Whether the hon. Gentleman likes the grant-related expenditure system of evaluation or whether he does not, the fact is that it is based on the same system throughout the country and takes into account varying social needs. If he tells me that the expenditure of inner London, which is 50 per cent. above the average expenditure in the rest of the country, is due to special problems, let us compare some of the other inner city areas such as Manchester, Liverpool and Birmingham. The expenditure per pupil in inner London is substantially in excess of those in other inner city areas.
I shall try to answer all the hon. Gentleman's questions, but, as I said, he asked me a great many of them. He said that the Inner London Education Authority proposes to spend £694 million this year. If that is the decision that its budget committee takes next week, it means that despite a 13 per cent. reduction in the number of pupils, and despite the economic climate, it has not made any attempt to save one penny in terms of real expenditure compared with three years ago. At a time when almost all other authorities, Labour as well as Conservative, are attempting to make savings that are consistent with the economic situation, it is a pity that the hon. Gentleman should apparently give support to the proposal of ILEA not to make any savings despite the reduction in pupil numbers, which is about twice that experienced in other parts of the country.
The hon. Gentleman asked me whether I believed that a 27 per cent. cut was possible in one year. Of course I do not believe that. I accept that the historical pattern of spending in London has been far greater than in other areas. No one suggests for a moment that it is possible to

achieve a 27 per cent. reduction. However, if ILEA were to consider its budget seriously against the background of a decreasing number of pupils, as other authorities are doing, I believe that it could make savings. For every £7 million of savings—just 1 per cent.—it would receive an additional £4 million in grant from the Government.

Sir Brandon Rhys William: Will my right hon. and learned Friend accept that parents in inner London, as well as ratepayers, will know that his decision to retain a single unitary authority for education in inner London has been based on a balanced and detailed assesment of the pros and cons and will be accepted as such? Does he realise that ILEA's intention to spend its way out through the top of eligibility for block grant will create an intolerable situation for ratepayers in inner London in the coming year? Therefore, will he proceed at once to place an upper limit on ILEA's expenditure in the coming year and not merely to rest on threats that if it overspends the Government may reconsider their decision at some future date?

Mr. Carlisle: I am grateful to my hon. Friend for what he said about the general decision to retain a unitary authority, which I believe to be right, and for expressing concern for the ratepayers of London, bearing in mind the amount of expenditure apparently carried out by ILEA. It would be wrong, on what may be a hypothetical basis, to draw me further at this stage than what I said in the statement, namely, that, if ILEA chooses to abuse the rating system in drawing its money, the Government recognise that additional financial controls will be needed and are considering all the possible options.

Mr. Ronald W. Brown: Will the Secretary of State review his statement that ILEA is doing nothing to help in this respect? In my constituency, it proposes to close three schools, and that has now been agreed. What the Minister has said is therefore not true. Does he understand that if he really wanted to investigate ILEA he could have set up an inquiry so to do? What he did was to use his own party machine, through the so-called Baker report, to make an unwarranted attack on ILEA based on false information and he has now made the right decision in the wrong way.

Mr. Carlisle: With great respect, the hon. Gentleman is not quite right. I shall deal with his second point first. The committee under the chairmanship of my hon. Friend the Member for St. Marylebone (Mr. Baker) was a party committee which produced a party report. Arising out of that and the general concern expressed, the Government decided to hold their own internal investigation at governmental level. What I am announcing is the result of that Government inquiry, not the result of the party review.
On the hon. Gentleman's first point, I do not have the figures at my fingertips, but he must realise that the fall in numbers in Hackney in particular is enormous. When I said that the authority was apparently attempting to make no savings, I was really quoting back to the hon. Member for Bedwellty (Mr. Kinnock) the figure of £694 million to which he appeared to give credence, which I am advised means no net savings as against 1978–79 expenditure if it is computed to those terms.

Mr. David Mellor: I thank my right hon. and learned Friend for his decision to retain ILEA as a single unit, a decision with which, as he knows, I completely agree. I wish to raise two points.
First, will my right hon. and learned Friend continue to work for a solution of the precepting problem? The ILEA precepting powers may look wonderful from Bedwellty, but they do not look so wonderful from Putney, where my constituents are having to pay a 25 per cent. rate increase at a time when rolls are falling as a result of ILEA's financial irresponsibility.
Secondly, will my right hon. and learned Friend confirm that the import of the final part of his statement was to make it clear to the present political masters of ILEA that he will continue to take an interest in their activities, particularly in view of their manifesto commitment, just published, to abolish streaming in secondary schools, to abolish single-sex and denominational education and to recognise the Trotskyist National Union of School Students—things that are so utterly disreputable educationally that there may be a similar outcry next year for him to look at the matter again?

Mr. Carlisle: I thank my hon. Friend for his approving comments on the Government's decision.
With regard to precepting, I have made it clear that the Government are concerned if ILEA is to use its power in a way that abuses the rating system. My right hon. Friend the Secretary of State for the Environment, in the context of his review of the rating system generally, is considering what additional steps should be taken in relation to those local authorities, including ILEA, whose expenditure is excessive. I should have thought that it was fair, at a time when concern has been expressed about the pressure upon the private sector of our economy, to remind rating authorities that a high proportion of that which they precept falls upon business and industry throughout the city and is a burden which they can hardly bear at this time. That is something that should be taken into account.
On my hon. Friend's second point, I have made it clear that we shall continue to keep under review both ILEA's financial prudence and its education services. As I said to the hon. Member for Bedwellty, I hope very much that ILEA and its officers will take account of the comments made in the HMI report and will take advantage of them. The manifesto to which my hon. Friend referred is only a draft manifesto. Nevertheless, like my hon. Friend, I must admit that one is appalled at some of the proposals, apparently contained in the Labour Party's draft manifesto, of the type that my hon. Friend highlighted. I cannot believe that those proposals would be to the advantage of the education of children in inner London, which is what, in the end, should concern us all.

Several Hon. Members rose—

Mr. Speaker: Order. I want to call as many right hon. and hon. Members as I can, but we must have shorter questions and answers.

Mr. Douglas Jay: In the interests of economy, can the Minister say how much public money and administrative time have been wasted by the stirring up of this wholly unnecessary controversy?

Mr. Carlisle: I should have thought that the sum was very small. It was a review at Minister of State level, which then reported in one document to the Cabinet as a whole.

Mr. A. J. Beith: Is not the Minister rather pleased that on this occasion he has defeated the Prime Minister who, together with a number of Conservative Members, was determined to break up the education system of inner London? If he is worried about accountability, why does he not go for a directly elected ILEA, with a fair system of election?

Mr. Carlisle: I do not, of course, accept the hon. Gentleman's first point. We reviewed the whole working of inner London, and the decision taken to retain a unitary authority was a decision of the Government as a whole.
On the second point, we considered the question of a directly elected authority.

Mr. Nigel Spearing: It is.

Mr. Carlisle: Perhaps I may put it another way. It might be said that a directly elected authority increases democratic control—it clearly weakens financial control if that directly elected authority has no means of having to assess the expenditure on education against the demands placed upon ratepayers by the other services within London.

Mr. Martin Stevens: I join those who have congratulated my right hon. and learned Friend on the decision that he has taken, which was in accordance with my own views. Will he look again at the position of primary and secondary schools, having regard to the need to bring their management closer to local parents? In particular, will he consider devolving the appointment of head teachers from ILEA centrally to what are now 10 ILEA divisions?

Mr. Carlisle: Obviously I am concerned to get the greatest possible involvement of people at local level with the schools to which their children go. Within the concept of a unitary authority, certainly I should be prepared to give consideration to any proposal put forward by any of my hon. Friends or, indeed, any hon. Member opposite which they felt achieved that end. However, I think that one tends to ignore the increasing role that we are encouraging parents to take in the schools, both in inner London and elsewhere. I believe that parents should be actively involved in encouraging higher standards in the schools.

Mr. Spearing: In his statement the Secretary of State used the word "abuse" in conjunction with 13 per cent. expenditure. Will he tell us which items he would exclude in that 13 per cent., either now or later? If he cannot, does he agree that he should withdraw the use of the word "abuse".

Mr. Carlisle: When I referred to the question of ILEA choosing systematically to abuse the rating system, I meant that it has the power—not unique, I accept—to precept on the ratepayers of the inner London boroughs. It seems to me that that takes with it a responsibility, when the authority is not directly elected in exactly the same way as other education authorities, to recognise the needs and concern of the ratepayers. Frankly, I believe that ILEA's expenditure is so greatly above the average for the rest of the country that there must be room to make some responsible savings.

Mr. William Shelton: Does my right hon. and learned Friend accept that he is to be congratulated on introducing this review in line with the 1963 Act? He


mentioned the HMI report on London. Is he aware that in that report the inspectorate said that mixed ability teaching in inner London did little to help the least able and hindered the most able? Following the question of my hon. Friend the Member for Putney (Mr. Mellor), is my right hon. and learned Friend aware that apparently the imposition of mixed ability teaching is contained in the Labour Party's manifesto for London?

Mr. Carlisle: I am aware that the removal of streaming from schools is in the draft manifesto. Obviously the day-to-day control of schools is a matter for local education authorities and not for the Department. All that I can do is to try to exert what influence I and my Department can by saying that I believe that at secondary school age the interests of the children are not best served merely by having mixed ability teaching.

Mr. Clinton Davis: Does the Secretary of State accept that the overwhelming view of my constituents, expressed at meetings and in letters to me, is that they pay tribute to, and support the work of, ILEA and do not accept the compendium of abuse in which he engaged against that authority? Does he also recognise that ILEA is unique inasmuch as, so far as I know, no other local education authority is confined to an inner city area? In that respect, ILEA has totally different problems from those which the Minister cited.

Mr. Carlisle: I do not accept that. One must remember that outside inner London education is not a metropolitan county responsibility but a borough responsibility. Therefore, one is dealing with inner London as against the borough of Birmingham, borough of Manchester, or borough of Liverpool rather than the surrounding areas. I therefore think that my analogy is fair.
It is not fair to suggest that I have involved myself in a compendium of abuse against ILEA. I made clear the concerns that have been expressed, which led to the setting up of the inquiry. Of course, I accept that the overwhelming volume of opinion of London parents was that they wished to see the retention of a unitary authority, but I question whether they did not accept the need for improvements within that authority.

Mr. Nigel Forman: Is my right hon. and learned Friend aware that the two-stage review which has just been concluded was worth while if only to demonstrate to the House and country that no particular pattern of ILEA organisation is sacrosanct, whatever the Socialist Party may say? Can he confirm that he is keeping ILEA under close review? Although there may be overriding educational reasons for maintaining the present structure, many of us are still not satisfied that education in the area is sufficiently accountable, both financially and politi-cally, in a democratic and direct way.

Mr. Carlisle: I am grateful to my hon. Friend. I confirm what I have already said, which is that we believe that a continuation of ILEA depends both on its educational standards and its financial responsibility.

Mr. Christopher Price: The whole House will be grateful that the Secretary of State has succeeded in defeating a combination of the Prime Minister and his own Under-Secretary of State. If he does not think that ILEA should cut by 27 per cent., by what percentage is he asking ILEA to cut this year? As he has a statutory responsibility under section 1 of the 1944 Act

to promote—that means to improve—the education of the people of England and Wales, is it fair that he should quote selectively from the HMI report, bearing in mind that his inspectors have never made a report on any other authority? If he were to compare the ILEA report with a similar report on any other urban authority in Britain, does he think that it would be all that different?

Mr. Carlisle: I repeat that I do not believe that we benefit the education of children of inner London by turning a blind eye to what that report said. I do not want to get involved in masses of figures if I can avoid it, but if one looks at the percentage of pupils who leave with no examination results and those who get more than five higher grades at O and CSE level, one will find that the percentage in inner London is considerably lower than the average for the country as a whole. That is a matter of concern to many parents who live in the London area.
I assure the hon. Gentleman that my hon. Friend the Under-Secretary of State and myself work in complete harmony on all occasions, and have done so since 3 May 1979. Although I accept that we cannot expect a reduction of 27·3 per cent. in one year, I regret that ILEA does not appear to have responded in any positive way to the approaches that have been made to it since 1978. Secondly, at the very least one could have expected from ILEA the same degree of effort to reduce its budget that has been achieved in many other parts of the country.

Several Hon. Members rose—

Mr. Speaker: Order. If they are brief, I shall call the four hon. Members who have been seeking to catch my eye.

Mr. Thomas Cox: Is the Secretary of State aware that the saddest feature of this whole issue has been the damage which has been caused to teachers, parents and parent-teacher associations, because there was never any support for any of the attempts which the Government have tried to make? As the right hon. and learned Gentleman knows, this all started in Wandsworth, but the leader of Wandsworth council is totally out of touch with the views of the people of Wandsworth. Is he really saying that we must dismiss all the social problems, such as housing and social services, which exist in inner London and watch our education services run down in the same way? London Members will fight such a move. We shall support our local authorities and ILEA in order to protect education services for our children.

Mr. Carlisle: Of course I am not suggesting that, because I do not accept the basis of the hon. Gentleman's question. I do not believe that the hon. Gentleman's colleagues who represent other city areas would suggest that their local authorities were failing to provide an adequate service for the children in those areas commensurate with the burden placed on the ratepayers. But the fact is that such local authorities are providing that service at a considerably lower charge than ILEA. I am not suggesting that one should devastate the education service in London. However, I believe that one can achieve a degree of financial prudence commensurate with a high educational standard.
I think that the hon. Gentleman is totally wrong to suggest that our proposals will cause damage. It is good that we have carried out a review of ILEA and have taken


decisions. I believe that the interest which parent-teacher associations, parents and others took when we set up the review is in itself healthy for education in the area.

Mr. Frank Dobson: Does not the Secretary of State accept that although inner London parents, such as myself, who send their children to inner London schools will welcome his belated decision not to dismember ILEA, they will be fearful about the later part of the statement, which seems to suggest that as he is too frightened to dismember it he intends to starve it to death instead?

Mr. Carlisle: I repeat what I said earlier. I should have thought that anyone who represented an inner London constituency and who was concerned at things such as the level of unemployment generally, particularly among youth, would recognise that those who have the right to precept on other's rates also have a responsibility to realise that they should not put too great a burden on those shoulders so as to create greater economic difficulties.

Mr. Alfred Dubs: Does not the Secretary of State accept that ILEA members were elected to have responsibility for the education of the children of London? He has suggested that ILEA members should have abdicated that responsibility because of a diktat from him and his colleagues in the Cabinet. Will he look again at the allegation which he made that ILEA has not adjusted its budget to take account of falling rolls? When I last spoke to ILEA it suggested otherwise, and said that it had taken account of the decline in the rolls when setting its budget for the coming year. Will the right hon. and learned Gentleman publish the results of the Government inquiry so that we can all see the basis on which the welcome bit of his decision was made?

Mr. Carlisle: I shall deal with the hon. Gentleman's questions in reverse order.
I see no need to publish anything. My commitment was that after the internal review had taken place I would report the outcome of it. That I have done. I made it clear that had we intended to change the unitary authority, I made it clear that I would have published a document. We have decided not to do so and, therefore, there is no need to publish anything further.
I realise that the figures are disputed by ILEA, but the best advice that I can receive is that the Government's figures are correct.
On the first part of the hon. Member's question, I am grateful to him for raising that point. It is true that every member who is elected to the GLC for the inner London area automatically becomes a member of the Inner London Education Authority. It does not contain the whole of the membership but it contains the majority; it is 35 out of the 48 members, so to that extent it is true that there is direct election. The trouble is that the GLC, as such, is not an education authority and therefore education does not tend to loom large in the issues put forward in the area of the GLC. What the hon. Gentleman said is a useful reminder to people that when they are voting for GLC candidates they are, among other things, voting for a member of the Inner London Education Authority as well as for a member of the GLC.

Mr. Martin Flannery: Will the Minister accept from me that there exists wide

admiration for ILEA in the provinces as well as in London, and particularly in Sheffield, where educationists want ILEA to be preserved and are therefore glad that it has been kept together? Will he also accept from me that the reason why good authorities are having to put up the rates is precisely because of the actions of central Government? Will he also take note of the fact that he is threatening ILEA, having kept it together, at the same time that £60 million of public money is being filched in order to keep private education and make it more powerful? Educationists throughout the country have taken note of that money disappearing from the public sector.

Mr. Carlisle: As the hon. Gentleman knows, because we have discussed this on many previous occasions, I do not accept the last point that he made. On the other point, of course I recognise that other authorities outside London have views about inner London. He is right to say that among the representations made to the Government about inner London were many from national organisatons as well as those directly involved within the Inner London Education Authority, as I said in my statement.
In regard to the rates, the hon. Gentleman is right in indicating that part of the reduction of the grant going to inner London, which before went through the boroughs but now goes direct to inner London, is caused by the decision to reduce the RSG from 61 per cent. to 60 per cent. It is caused by the decision to shift part of the balance out of London to other parts of the country and in part by the historic overspending in London. I remind the hon. Gentleman, as a person who represents a constituency other than one in inner London, that the shift within the rate support grant of a certain amount of money from London to the rest of the country only partially offset the vast shift done at the cost of the rest of the country into inner London during the period of office of the Labour Government.

Fishing Industry

Mr. Albert McQuarrie: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the critical situation which has arisen at fishing ports throughout the United Kingdom and particularly at the ports of Fraserburgh and Peterhead in my constituency.
I am grateful to you, Mr. Speaker, for having accepted this application. This matter is topical, for the reason that it is happening now. It is urgent, because an escalation of the present situation could threaten sections of the economy and put in jeopardy the jobs of over 100,000 people who are employed directly and indirectly in the fishing industry, covering 18,000 catchers and 90,000 people in the processing and allied sections of that industry.
This crisis arose out of the fact that an Icelandic reefer vessel carrying 200 tonnes of herring, 20 tonnes of laminated block cod and 15 tonnes of saith arrived at the port of Fraserburgh for delivery to a local processing company. There had been ever-increasing anger by the fishermen at the amount of white fish that was being imported into the United Kingdom at prices much lower than those that our fishermen were able to obtain at the


quayside. There had been a justifiable grievance at the continued increase in the import of white fish, which amounted to 234,175 tonnes in 1980, with a net value of £180 million.
The fishermen, who are having the most difficult of times because of the failure, so far, to achieve a common fisheries policy, are deeply worried. They cannot make ends meet. When they see—as one example—that their counterparts in Holland can obtain fuel at £127 per tonne and in France at £117 per tonne, as against the price in Lowestoft of £153 per tonne, their anger is justified. The fishing industry has never been one for militant action. What is taking place now is not being done merely to cause disruption; it is the only way in which the fishermen can demonstrate the deep feelings that exist about the problems that they face—problems that are, tragically, growing day by day.
Imports must be restricted to the essential requirements for the processors. There is no way in which our fishermen can compete with those from Iceland and Norway, when in those countries currency has depreciated by the greatest amount, in terms of sterling, which automatically allows importers from those countries and other parts of Europe to sell white fish in the United Kingdom at prices for cheaper than can be obtained by our own catchers.
The matter is critical. Action must be taken at once, and some solution must be found to let the fishermen return to sea. With the enormous dead-load being carried by the fishermen in terms of their vessels, and the heavy overheads that were spoken about and that are not matched by quayside prices, I ask that this House should be allowed to debate the problem and try to arrive at a solution pending the completion of the common fisheries policy, which would of itself remove many of the problems that face the fishing industry today.

Mr. Speaker: The hon. Member for Aberdeenshire, East (Mr. McQuarrie) gave me notice this morning, before 12 o'clock, that he would seek leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the critical situation which has arisen at fishing ports throughout the United Kingdom and particularly at the ports of Fraserburgh and Peterhead in his constituency.
As the House knows, under Standing Order No. 9 I am directed to take into account the many factors set out in the Order but to give no reason for my decision.
The House will know that I do not decide whether this matter is to be debated. I merely decide whether there should be an emergency debate tonight or tomorrow. The hon. Gentleman indicated quite clearly that the matter to which he has drawn our attention is very grave, but I regret that I cannot rule that his submission falls within the provisions of the Standing Order. Therefore, I cannot submit his application to the House.

Mr. Frank Allaun: On a point of order, Mr. Speaker. I think that you are aware that I, too, have applied to move the Adjournment of the House under Standing Order No. 9.

Mr. Speaker: Yes, but the hon. Gentleman, who is a very experienced Member of the House, knows that he did not make his application before 12 o'clock. The House has given me instructions. It is always difficult when I have to apply the rules, especially to very senior Members. We are all senior here, but the hon. Gentleman is a Member with great experience, and he knows that I must abide by the rules.

Mr. Allaun: Further to that point of order, Mr. Speaker. You are putting me in a Catch 22 position, because earlier this morning I asked for a private notice question on this issue. I telephoned at 12.15 pm to inquire whether this had been granted. You, Mr. Speaker, decided in your wisdom that that was not to be so.
I could not seek leave to move the Adjournment of the House under Standing Order No. 9 properly before 12 o'clock. Now you say that I cannot properly ask for the Adjournment under Standing Order No. 9 after 12 o'clock. In fairness to hon. Members of the House, a brief application under Standing Order No. 9 is in order.

Mr. Speaker: I must be firm. The hon Gentleman has broken the custom of the House by revealing that he applied to me for a private notice question. It is wrong if when Mr. Speaker does not allow a private notice question an hon. Member says "Very well, I shall raise the matter under Standing Order No. 9." That is an impossible situation with which to confront Mr. Speaker. The hon. Gentleman made his choice, as all hon. Members must. They must decide whether they wish to ask for a private notice question or whether they wish to make an application under Standing Order No. 9. It is not fair to put the blame on me when the rules are clear.

Mr. Allaun: Further to that point of order, Mr. Speaker. You say that I have broken the custom of the House by saying that I wanted to apply for a debate under Standing Order No. 9 on the neutron bomb. On a previous occasion when I applied to you, Mr. Speaker, to move the Adjournment of the House under Order No. 9, my request was not granted and the press were informed. They did not learn about it from me and I was not in the least worried. It is no use you, Mr. Speaker, saying that I have broken the custom of the House.
You, Mr. Speaker, are saying that I cannot have it both ways. That is precisely what you are preventing me from doing. If I had said to you this morning "If I do not succeed with a private notice question I shall apply for a debate under Standing Order No. 9" I should have been wrong. I consider that I have behaved properly and courteously.

Mr. Speaker: Because of the hon. Gentleman's long experience I have allowed him to conduct his argument, although I should have pulled up any other hon. Member long ago. No Speaker can have an argument with a Member of the House. We have both taken the points on board and they have been registered.

Retail of Motor FuelM (Weights and Measures)

Mr. Matthew Parris: I beg to move,
That leave be given to bring in a Bill to make subject to statutory instrument subject to the approval of both Houses of Parliament changes in the system of measurement according to which motor fuels are retailed.
I realise that the House is impatient to move on to the main business of the day and so I shall try to be brief. The gallon is on its death bed and I do not wish it to go without at least a brief swan song. I wish to make changes in the system of measurement according to which motor fuels are retailed.
The Bill would simply return to Parliament the powers that it relinquished in 1897 to decide the pace and timing of the metrication of fuels. It would return to Parliament the power either to promote, or if Parliament wishes, to block that process altogether.
The major oil companies plan to abandon the gallon later this year. They are free by law to do so. I accept that they have some substantial reasons for doing so. The House may accept their reasons or it may not. At present it has no say. My Bill would give the House the final say. It is overdue. The whole thing is in the most unholy mess. For instance, are we to measure petrol in litres and distance in miles? Will we have to calculate fuel consumption in miles per litre? What sort of hybrid instrument panels will motor manufacturers have to fit to their cars? For how long will it all continue?
The metrication of distance is coming, so we are told. We do not know when. It has been coming for the last 100 years or so but so has Christmas and so has the Channel tunnel and the reform of the common agricultural policy.
There is a case, although I oppose it, for abandoning both the gallon and the mile now. There is also a case for reprieving both of them for a while. There can be no case for staggering awkwardly into the most difficult position of all, with one foot in each camp—one in the metric and one in the imperial camp.
The oil companies are impatient. When the price of petrol reaches £2 a gallon petrol pumps will not be able to do the calculation without fairly expensive modification. Reducing the unit of measurement to a litre will obviate that.
Hon. Members with more than a passing acquaintance with the internal gearing mechanism of petrol pumps will understand the reasons for that. Hon. Members who have no such knowledge perhaps will accept my assurance and that of my hon. Friend the Member for Northampton, North (Mr. Marlow), who has been in the Army and understands these matters, that there are problems involved in changing the mechanism of petrol pumps. He and I, at the kind invitation of my hon. Friend the Minister for Consumer Affairs, visited the National Weights and Measures Council laboratory. We were grateful for the patience of the officers who explained the problems to us.
We do not deny that there are problems, but we believe that there are other ways of meeting them. I shall not dwell on them this afternoon, because the point of my Bill is not to pre-empt the decision but to give the House, and not the oil companies alone, the opportunity to make the decision.
If there were free and vigorous competition in the retail of petrol there would be no such need. The public could choose between metric petrol stations and imperial petrol stations. I have little doubt which most people would choose. But when the trade is dominated as it is by a cartel the choice is denied the consumer. The cost in terms of bother is imposed upon the consumer without redress.
In our law and commercial practice a large bother caused to a single individual must be paid for one way or another. However, a multitude of small bothers caused to a large number of individuals is a cost which can rarely be charged to anybody. So it is in this case. The motorist, for instance, cannot insist that he pays for his petrol in deutschemarks because Parliament has protected garage owners against such insistence. However, the garage owner can insist that the motorist accepts his fuel in litres—at any rate he would be so able unless the House accepts my Bill which will enable us to provide that element of protection for the motorist.
At this stage I should cease the pretence of objectivity and come clean with the House. I must tell the House why I hate litres. I apologise for sounding like a sociology lecturer, but I believe that metrication causes alienation. Just as much as by high principles, economic forces and policemen, society is held together by custom, by familiarity, by good humour, by a thousand common understandings, common ways of seeing and doing things and a hundred familiar arrangements. Habits and affections are as powerful as passion, Lord Denning and the money supply rolled into one. They all contribute to the sense of belonging to a society, the ways of which are ours. When that sense weakens other more tangible parts of the social order will also weaken.
I do not pretend that our systems of measurement are an integral part of the social order. Clearly, they are not. They are only one small part of what is habitual and familiar. Alone they are dispensable. So was the threepenny bit, the county of Rutland and the North Riding. In each case there was a reasonable, rational argument for making the change.
Some hon. Members might say "What a pretentious argument to deploy in such a trifling cause." It is a trifling cause and it is a pretentious argument. However, against each of the modest and inoffensive steps that we have made in the name of progress and rationalisation, the argument has always seemed pretentious.
We have taken away from people their system of money, their systems of measurement, their county names, their county boundaries, their town councils and their village schools. At each stage there have been sensible arguments for the change. As each familiar landmark recedes, only the eccentric refuse to move on. Only the eccentric ever do.
It has been a long and weary road. How unfamiliar and unfriendly the landscape is beginning to look. I know the arguments for metrication. They are powerful arguments. They are the same arguments that can be used and will be used for changing over to driving on the right hand side of the road.
I can hear it now. There will be murmurings about our European partners, the needs of the motor industry, increasing traffic to and from the Continent and hazards to life and limb inherent in the divide. Admittedly, short-term cost people will say "What a nuisance"—

Mr. Speaker: Order. The hon. Gentleman was so interesting that I overlooked the fact that he should not say what he would say if he had had permission. He has to make out the reasons why his Bill should be given precedence.

Mr. Parris: I shall not pursue that line of argument Mr. Speaker. I was trying to demonstrate that the arguments for metrication were weak because they could be used for other things which I do not believe that the House would be disposed to accept. I confess to a deviant preference. I prefer driving on the left. I prefer gallons. I prefer feet, inches and miles. I do not care if my hon. Friends report me to my constituency association for disloyalty to Europe. They may try anonymous telephone tip-offs if they wish.
As such people dance merrily off behind the Pied Piper towards some distant butter mountain, some of us are limping sceptically behind. Garlic, EEC directives, litres and lederhosen are all part of the same thing. I imagine it will all end in our giving away Gibraltar.
I beg my right hon. Friend the Minister for Consumer Affairs—of whom I have not yet despaired—to hang behind with the rest of us, lest her good name be impugned among the petrol pumps or she be exposed to comment on the forecourt.
Most of us know in our heads that metrication must come. Many of us wish in our hearts that it would not. My Bill poses no challenge to that certainty, but it offers the House an opportunity for a small display of petulance fuelled by sentiment.

Question put and agreed to.

Bill ordered to be brought in by Mr. Matthew Parris, Mr. Ivor Stanbrook and Mr. Christopher Murphy.

RETAIL OF MOTOR FUEL (WEIGHTS AND MEASURES)

Mr. Matthew Parris accordingly presented a Bill to make subject to statutory instrument subject to the approval of both Houses of Parliament changes in the system of measurement according to which motor fuels are retailed: And the same was read the First time; and ordered to be read a Second time upon Friday 6 March and to be printed. [Bill 61].

INDUSTRY [MONEY] (No. 2)

Queen's Recommendation having been signified—

Resolved,

That, for the purposes of any Act of the present Session to increase financial limits which apply in connection with the National Enterprise Board, it is expedient to authorise any increase in the sums payable out of money provided by Parliament under any other enactment attributable to provisions of the said Act of the present Session—

(a) increasing the financial limit for the time being specified under section 5(3) of the Industry Act 1980 for the purposes of section 3 of that Act (property transferred to Secretary of State from National Enterprise Board) to £4,400 million; and
(b) providing for that limit to be increased or further increased by order of the Secretary of State made with the consent of the Treasury to an amount not exceeding £5,250 million.—[Mr. Tebbit.]

Orders of the Day — Industry Bill

As amended (in the Standing Committee), considered.

Clause 1

FINANCIAL LIMITS RELATING TO NATIONAL ENTERPRISE
BOARD

The Minister of State, Department of Industry (Mr. Norman Tebbitt): I beg to move amendment No. 5, in page 1, line 10 leave out 'increased to £2,251 million' and insert 'reduced to £750 million'.

Mr. Speaker: With this we shall discuss Government amendments Nos. 6 to 13 and 18.

Mr. Tebbit: I am glad to see the right hon. Member for Salford, West (Mr. Orme) in his place. He is not looking very intimidated, perhaps fortified by the earlyday motion on the Order Paper. As he knows, I have never taken personal attacks to heart but I am sorry if he felt that I went so far as to cause him personal stress or distress in what I said to him last week. If I did, I am sorry. I thought that we were in the normal hurly-burly of the House, but I should not like to cause him personal offence.

Mr. Stanley Orme: I thank the Minister for those words. I hope that the House will excuse my voice. I have a sore throat. I thank the Minister for making public what he put to me in writing. I accept what he says without equivocation.

Mr. Tebbit: I thank the right hon. Gentleman. I am sure that we shall bang words back and forwards across the Dispatch Box with great vigour from time to time, but never with personal malice.

Mr. Robert Adley: I do not wish to intervene in the duet between my hon. Friend the Minister and the right hon. Member for Salford, West (Mr. Orme). The serious point that perhaps lay behind my hon. Friend's comment the other day is that, if we are to discuss Japanese investment in this country, we must recognise that the Japanese are particularly sensitive to public opinion, from opinions emanating from the House and hon. Members representing particular constituencies. We should all be aware of that. Does my hon. Friend agree that that feeling has come through to him in his discussions with Datsun?

Mr. Tebbit: Yes, indeed. Although I understand what my hon. Friend says I do not think that it is relevant to amendments Nos. 5 to 13, and amendment No. 18.
All the amendments are required to make changes in the financial limits of the National Enterprise Board. The Secretary of State needed to accommodate the Government's decisions on British Leyland's 1981 corporate plan, which was announced by my right hon. Friend in his statement on 26 January. In that statement, as the House will recall, my right hon. Friend announced that the Government have approved the 1981 British Leyland corporate plan and have agreed to fund its first two years—that is £620 million in 1981–82 and £370 million in 1982–83. I heard the indrawing of breath of my


hon. Friend the Member for Knutsford (Mr. BruceGardyne). Those figures have exactly the same effect on all of us.
My right hon. Friend also announced that it was the Government's intention that the public shareholding in BL should be transferred from the National Enterprise Board to the Secretary of State after the Bill receives Royal Assent.
Amendments Nos. 5 to 12 make the necessary adjustments in the financial limits of the National Enterprise Board and the Secretary of State to accommodate these two decisions. Amendment No. 18 provides that the new limits will come into operation on 31 March 1981, the date on which we intend the transfer of the BL shareholding to take place.
Before I deal with the reasons for these decisions, it would be helpful if I go briefly through the amendments in some detail to explain the effects of each. Amendments Nos. 5 and 6 reduce the National Enterprise Board's financial limits to £750 million. That is the level that will be left for the NEB's other investments when BL has been transferred to the Secretary of State. That limit covers private sector financing for the NEB's companies as well as the public money which the board invests in them. As my right hon. Friend has said, there would be plenty of room within the limit as the NEB disposes of its existing investments.
Amendment No. 7 is a tidying-up measure which repeals the provisions of section 8 of the Industry Act 1975, which are no longer necessary. Subsections (2)(a) to (2)(c) were introduced by section 5(2) of the 1980 Act to provide the mechanism for the Secretary of State to reduce the board's financial limit when shareholdings were transferred by the board to him. It also provided that the NEB's limit should not be reduced below a minimum level of £750 million. Now that this minimum has been reached it is clearly unnecessary to have provisions enabling the Secretary of State to reduce the limit to that minimum.
Amendment No. 8 is a consequence of amendment No. 12 which removes sections 5(4) of the 1980 Act. I shall come to that in a moment. Amendments Nos. 9 and 11 increase the Secretary of State's limit to £4,400 million with the power to increase that further by order to a maximum of £5,250 million. In accordance with normal practice amendment No. 10 specifies that the Secretary of State shall exercise this power only with the approval of the Treasury. The increases for which amendments Nos. 9 and 11 provide are intended to cover the needs of BL following its transfer to the Secretary of State. The House will recall that £1,500 million of the NEB's existing limit of £2,250 million is for BL's needs. When the Bill was given its Second Reading my right hon. Friend made it clear that a further increase would be needed to cover BL's needs, whatever decisions were taken on the corporate plan. However, no estimate could be made of the increase needed until the Government had taken a decision on the plan. Clause 1 accordingly included provision for an increase for BL, but set it for the time being at what is now referred to as a token level of £1 million.
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Of the new limits specified for the Secretary of State in these amendments, £2,900 million, which can be increased by order to £3,250 million, is intended for BL.

As my right hon. Friend explained on Second Reading, the balance of £1,500 million, which can be increased by order to £2,000 million, is for Rolls-Royce.
Of course, it is perfectly legitimate that I should be asked why it is necessary to provide for such a large financial limit for the needs of BL when the Government have agreed to provide considerably less than this—£990 million over the next two years—in public funding. It is necessary because the limits cover the company's external financing from private sources as well as public investment. Accordingly, the limits now specified are intended to cover BL's funding from private as well as public sources over the next five years.

Mr. Nick Budgen: What has BL said about the possibility of selling parts of the empire over, say, the next five years? I am sure that my hon. Friend will agree that it has been much talked about. Every indication we have heard from BL is that it has resisted that. We should like to know what funding can be expected from that source.

Mr. Tebbit: I do not want to avoid my hon. Friend's question, but perhaps I may come back to it in the course of my remarks on the general reasoning behind the funding, as opposed to those on the way in which the amendments operate.

Mr. Michael Grylls: My hon. Friend will be the first to appreciate that the circumstances surrounding the borrowing of the NEB and BL are incredibly complicated. Will he give us some indication of the extent of BL's private borrowings? On amendment No. 5 concerning the NEB, why is it necessary still to have a limit of £750 million? I understood that at he end of 1975 all the borrowings—the public dividend capital, the National Loans Fund payments, the external borrowings of subsidiaries and the guarantees, which excluded BL and Rolls-Royce—at that time totalled £268·5 million. No doubt the figure has increased since then, but the NEB has also disposed of assets. Why, therefore, is such a high ceiling needed? It would be most useful if during the debate my hon. Friend gave answers to some of these questions.

Mr. Tebbit: I shall certainly be able to help my hon. Friend in that direction, particularly if the House is moved to give me leave to reply to the debate.

Mr. Dick Douglas: Will the Minister also give some indication of the rate of interest charged on BL's private borrowings?

Mr. Tebbit: I am not sure that I shall be able to help too much in that direction because, to a considerable extent, these matters are covered by commercial confidence. However, it is not unusual for public sector organisations to borrow on the private market. British Airways among others have borrowed extensively abroad and feel that that is a reasonable way of conducting their affairs.
Amendment No. 12 removes the aggregate limit and is needed to provide an overall ceiling for the two limits, since it is possible to increase the Secretary of State's limit by correspondingly reducing the NEB's figures. Now that the NEB's limit has been reduced to the minimum level of £750 million, the aggregate control is no longer necessary.
Amendment No. 18 specifies that the new limits in clause 1 will come into operation on 1 March 1981, which is the date when we intend that the transfer of BL to the Secretary of State should take place.
I turn next to the decisions, as opposed to the mechanisms of the amendments for achieving their purpose. As the House will understand, before we arrived at the decision to provide this funding for BL we carefully considered all the choices that were open to us. The board of BL provided us towards the end of last year with a plan for the company's business activities over the next five years. It is not and never has been our practice to try to second-guess the commercial judgment of the boards of publicly funded companies. I am not sure that there is a great deal of evidence that Ministers and civil servants are particularly well equipped, on the basis of their overall track record of the past 30 years, to do so.
However, it was our clear duty to the taxpayer, who ultimately has to foot the bill for BL, to ask three main questions. First, did the plan offer a realistic prospect of success? Second, what would be the consequence of refusing to support the plan? Third, was there any middle way between supporting the plan to the tune of £990 million and refusing to support it?
To take the last of those questions first, my right hon. Friend the Secretary of State made clear when he announced that decision last week that we could find no middle way that made commercial sense for this company. I know that it is tempting to think that selling off the currently profitable parts of the company would at least reduce the cash call on the Government as my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) suggested. It was a matter we had to examine very closely in conjunction with the board. Eventually, however, we and the board were convinced that these parts of the business, perhaps with some peripheral parts as an exception, were vital to attract the collaboration of other manufacturers which must be the long-term objective of the company if it is to survive.

Mr. Budgen: Why, for instance, are trucks and buses essential in the way that my hon. Friend suggests?

Mr. Orme: May I suggest that the truck and bus division, successful as it is, also needs some of the money to survive and to expand?

Mr. Tebbit: I take the point of the right hon. Member for Salford, West but I do not think that it quite answers my hon. Friend's point, which was why we could not take out those parts at present. The simple answer to my hon. Friend is that currently, at any rate, they would not fetch enough money to make any real difference to the company's prospects. Secondly, the company feels that while it is able to consolidate its sales efforts overseas over a wide range of products it is better able to carry on its business.

Mr. James Hill: during the negotiations there was a strong rumour that Sir Michael Edwardes was threatening to resign unless my right hon. Friend the Secretary of State gave way throughout. We on the Back Benches suspect that Sir Michael was giving my right hon. Friend the Secretary of State the same treatment as he is giving to his labour force.

Mr. Tebbit: My hon. Friend the Member for Southampton, Test (Mr. Hill) should not believe rumours.

If the implication of what he said was that Sir Michael Edwardes was playing the role of the "bolshie" shop steward and was trying his luck with my right hon. Friend, I do not think he would have got any further with my right hon. Friend than the odd "bolshie" shop steward has got with Sir Michael Edwardes.

Mr. Adley: Obviously no one expects my hon. Friend to admit the truth, as so many of us believe, of what my hon. Friend the Member for Southampton, Test (Mr. Hill) has put. However, has Sir Michael Edwardes expressed any opinion about whether he would like to see parts of BL sold? Is he opposed to that or not?

Mr. Tebbit: If Sir Michael Edwardes had said to us that he would like to sell off parts of British Leyland because in his commercial judgment it was the best thing to do, we would not have stood in his way. If my hon. Friend thinks that it is pointless to ask me a question with the expectation of getting a true answer, I should be obliged if he would let me get on with my speech without so many interventions, because his interventions will not receive replies which satisfy him.
We and the board were forced to agree that these major parts of the business are vital if we are to get collaboration with another manufacturer so that the company can survive—not merely survive, but survive outside the public sector.
We also carefully considered the implications of not giving support to. the plan. It is apparent that it would not be a no-cost route for the Government to follow. As the House is aware, there are about 140,000 people now employed in British Leyland. About 70,000 of those people are in the car business. A large number of other jobs are dependent upon the continuation in business of BL.
It is a matter of judgment how many jobs would be lost if BL were to close. The figure of a loss of 1 million jobs was mentioned in the House, which I think was way out. I am tempted to add up the total number of jobs forecast to have been lost as a result of certain closures by Opposition Members in the last couple of years.It would probably add up to more than the working population of the United Kingdom. It is easy to use extravagant multipliers. [Interruption.] I am grateful for that support. These days, one has to take it from wherever one gets it.
There is no doubt that whatever figure one puts on it, the number of jobs which would be lost inside and outside British Leyland if the company were to close down is considerable—to put it mildly. Job losses on that scale cost the taxpayer money in terms of redundancy and benefit payments and lost tax revenue. No one can doubt that, at a time of high unemployment, those who lose their jobs will be not net contributors of tax paid to the economy but net drawers of benefit. On each occasion, we must face the question whether it is worth while to keep such people at. work if they are consuming wealth more rapidly than they are creating it.
Those are and were heavy considerations in our judgment, but they are not the overwhelming ones. If at any time we became convinced that the company did not have a viable future, I assure the House that we would not shrink from taking the appropriate action, costly though it might be to the taxpayer, because not to do so would be even costlier.
Therefore, the decision turned on the first of my questions: did BL have a reasonable chance of achieving


its objectives within the time scale it had set up? In arriving at our decision, we had to consider closely the reasons for BL's poor financial performance during 1980. At the half year, the company turned in a trading loss of £182 million. Although it managed to keep within the limits of Government funding which had been agreed, that was at the expense of reductions in both working capital and capital expenditure.
Therefore, in looking at this year's plan, we had to try to decide how much of last year's poor financial performance was a self-inflicted wound. We concluded that Leyland's poor financial results were due—largely at any rate—to economic factors beyond its control and to which it was unable to respond in time.
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We took into account the fact that many British companies found it difficult to adjust to the strengthening pound last year. We took into account the fact that many major vehicle manufacturers all over the world turned in large losses last year. BL may be our spectacular, but it has not been alone in its difficulties.
Against the backdrop of its troubled financial performance, there was some of the best news for years from BL. It was an unprecedentedly good year for industrial relations within the company. Fewer than 2 per cent. of working hours were lost due to disputes. A substantial new package covering working practices was introduced in the spring of last year, and productivity in BL cars rose by 10 per cent. after a sustained fall for several years. In some parts of the business, notably the Metro operation, it rose by much more. All that happened against a backdrop of 28,000 redundancies and a wage settlement in single figures for the third year running.
During 1980 some of the first fruits of past investments started to come through. As well as the highly successful launch of the Metro, British Leyland brought out a new heavy truck model which has had a good reception, although the market for trucks is now extremely poor. Those new products, together with modifications to some existing products, have helped to turn up the company's market share during the second half of 1980. We believe that during 1980, under difficult conditions, the BL management and work force made real progress towards improving competitiveness. When we weighed up the alternative courses of action open to us we decided to fund the company's plan for two years.
Many years of investment at the taxpayers' expense are now showing results. In order to give the company a chance of success now we cannot let it rest on the laurels of one or two successful new products. Therefore, we have agreed the BL should produce a new medium car—the LM10—as well as strengthening its range of other products. We are also providing the company with funding for restructuring. The radical reorganisation of the business that Sir Michael Edwardes has undertaken is not yet complete. He had much ground to make up when he took over, and the company is intending to incur substantial restructuring costs over the next two years.

Mr. John Bruce-Gardyne: I am not sure whether this is the right time to raise this matter. If it is not, perhaps my hon. Friend will come back to it later.
It would be helpful to have the Government's reaction to British Leyland's forecast of the trade-weighted

exchange rate, because that is crucial. BL says that it has been ruined by the movement of the exchange rate which it got wholly wrong. Do the Government believe that the forecast of a fall from the current rate of 81 to 75 this year, and 65 by 1985 is realistic, bearing in mind that if the moneys which the House has been asked to vote today are funded through Government borrowing, and borrowed at adequate rates of interest, this is likely to push the exchange rate up, rather than down?

Mr. Tebbit: British Leyland was not the only company to get its estimate of the movement of sterling substantially wrong last year. Rolls-Royce was another, and there were many other companies in the private sector which did the same. There were also many economic journalists, some in well-known Sunday newspapers, who got it wrong. Very few people got it right. I believe that it will be difficult for anyone to get it right again this year.

Mr. Budgen: Mr. Budgen rose—

Mr. Tebbit: I shall not give way at the moment.
Sterling has sharply fallen—particularly in relation to the dollar—in the last few days. I am not sure whether my hon. Friend or any of the other journalists on the Sunday papers have made fortunes by being wide awake enough to know that that was going to happen and to speculate on it successfully. I doubt whether any of those who write the smart articles in the press about what the level of sterling will be in future are backing their judgment with their own money. Let us be frank. Her Majesty's Government are not backing Leyland with anybody's money except the taxpayers'.
The point that I should make is that if it is shown that the assumptions in the Leyland plan are so far out that the plan is incapable of being carried through—that is one of the contingencies which has been envisaged in the discussions between the company and the Government—the plan would have to be reviewed.

Mr. Budgen: Is it not the case that when private sector exporters take a view about exchange rate risks, they operate in currency markets or insure in other ways to prevent them being hit by exchange rate fluctuations? Is it not odd that Rolls-Royce originally went bust because of its mistakes regarding the exchange rate yet, again, it has recently taken large gambles on the exchange rate which were not covered by any form of insurance? Are we to understand that both Rolls-Royce and BL are to take another big punt on the exchange rate, again without buying any insurance, in anticipation that, if they get it wrong, the taxpayer will pick up the debt?

Mr. Tebbit: Uncharacteristically, my hon. Friend is tending to bring together two points without separating them properly, as he should. It is true that when a private sector company has contracted to make a sale or is in the process of a delivery, it may ensure against currency risks forward. But I do not think that it would be possible for BL or anyone else to find someone to insure it on a plan of this magnitude against its estimates of the movement of currencies throughout. Those two things are different. One should insure where possible, but it is not possible to insure a plan in this way.

Mr. Cranley Onslow: Perhaps I may complete, or correct, that point on the original bankruptcy of Rolls-Royce, of which today happens to be the melancholy anniversary. Surely it was nothing to do with


any miscalculation of the exchange rate that caused the bankruptcy; it was simply that it could not calculate properly the cost of what it was making.

Mr. Tebbit: My right hon. Friend is right. I am grateful to him for all that he said, except the reminder of that melancholy anniversary. Not all the funding that BL requires is to come from the Government. As in the past, BL will continue to seek loans from the private sector. The BL board's longer term objective is to achieve collaboration with one manufacturer or several manufacturers to bring about the company's recovery—and recovery means that BL need no Longer be State-owned if it can achieve recovery.
BL already has a major collaborative arrangement with Honda, and the joint BL-Honda car will be launched later this year. We hope that BL will be able to secure other farreaching collaborative deals, including the taking of a major equity stake in BL by outsiders if that makes commercial sense. It must make commercial sense to the outsider, or he would not come in.
I am sure that some of my hon. Friends have it in mind to tell me that they remain less than totally convinced by the arguments that I have put forward to explain our decision. Let me anticipate them by reminding them of the letter sent by Sir Michael Edwardes to my right hon. Friend the Secretary of State for Industry. That letter was published in the Official Report on 26 January. In that letter Sir Michael refers to what would happen if his plan was not being achieved. He records the intention of his board to initiate a review of the plan if
it appears impossible to bring about recovery within the timescale envisaged.
Such a review would be initiated in consultation with the Government. If circumstances make it necessary, the Government will not shrink from taking realistic decisions, no matter how serious the consequences might appear to be. If there is no hope for Leyland, there is no point in pursuing the plan.
We have notified the European Community Commission of our intention to provide these funds to BL. As BL does not require the funds until the beginning of April, the Commission has adequate time to complete its customary consideration. We do not expect the Commission to raise objections to our proposal.
I referred earlier to the necessity for these clauses to be amended in view of the decision to transfer BL from the NEB to the Secretary of State. A similar decision was taken on Rolls-Royce during 1980. The decision to transfer BL reflects the NEB's wish to see the BL holding treated in a comparable way. It was also the wish of the BL board that the holding in the company should be transferred.
BL is a large company. Its annual turnover is about £3 billion. It has been in almost total public ownership since 1975, and substantial Government loans and equity have been channelled to the company since then. The size of the sums involved in the public funding of BL is such that the Government are inevitably closely involved in major decisions about the company, and the proposed transfer recognises that reality.

Mr. Terry Davis: Will the Minister clarify how the Government intend to proceed before he concludes his speech because it will affect later contributions to the debate? The Minister has explained the reason for these amendments. In this context it is

understandable that the Minister should refer almost entirely to BL's corporate plan for 1981 and should touch only briefly on a review of BL's performance in 1980. When a similar decision was taken in December 1979, the Secretary of State made a statement and the Government took an early opportunity to arrange a debate a few weeks later during which the House was able to debate not only the corporate plan for the coming year but the company's performance during the preceding year.
Do the Government intend to act in a similar way this time? Will they arrange a debate, perhaps after the annual accounts have been published, during which we can look at the company's performance in 1980 in some detail?

Mr. Tebbit: It would always be for my right hon. Friend the Leader of the House to decide on such a proposition. It has not been in my mind to propose that we should have a separate debate to consider what has happened in BL. If the House agrees to these sums and these arrangements, I think that BL should be given a chance to get on with the making and selling of motor cars rather than being perpetually looked at and dragged up by the roots to see whether it is growing before putting it down again. We must keep an eye on what is going on, but it is not always productive to debate BL's affairs. If the hon. Gentleman has the good fortune to catch Mr. Speaker's eye. he may be able to make some of the points that he would have made in a separate debate.

Mr. John Maxton: Some Opposition Members hoped that the Minister might say a little more about the first amendment, which reduces the NEB's financial arrangements to £750 million. Yesterday, the Daily Express described the effect of this as the NEB having its wings clipped. We should like to know a little more about the impact of this change.

Mr. Tebbit: If the House would agree to my replying to the debate later I could deal with those points then. I think that most hon. Members are anxious to debate the BL issue, but I shall certainly respond to any points on the NEB at that stage.

Mr. Orme: We welcome the proposals for the funding of British Leyland. They are important for the survival of a great British industry. We believe that the breathing space that the sum of £980 million gives to British Leyland is also important. It has two years in which to turn around some of the difficulties and problems that it has faced.
A point was raised earlier about the trucks and bus division of British Leyland. A recent editorial in the Financial Times commented that that division needs financial support in its development in the coming months and years. It needs public support and public money.
The Minister commented on my remark that if British Leyland closed about 1 million jobs could be affected, directly or indirectly. I draw the attention of the Secretary of State to that because he challenged me on the figure. I have looked into the matter. The first reference to that figure was made in 1975 by my right hon. Friend the Member for Huyton (Sir H. Wilson) when he was Prime Minister and when he announced the Government's acceptance of the Ryder report. In a report for Sewells Digest in December, Professor Bhaskar gave a figure of 700,000. I consulted Britsh Leyland, and perhaps I gave the impression that that was the figure to which the


management subscribed. It would be incorrect for me to say that the management subscribed to that figure, although I was informed that it is widely accepted within British Leyland. I was told that, if British Leyland were to close, 400,000 jobs would be affected directly.
We can go further than that. If British Leyland closed, the component manufacturers, many of whom are working only partially for British Leyland, could be affected. Many of those companies could collapse and close. We must also take into account steel, the mining industry and transport. I do not want to bandy figures about, but I feel that there is justification for saying that a large number of jobs—between 700,000 and 1 million—would be involved. That is the size of the problem about which we are talking.
If we look at the problem in terms of employment we must take into account the fact that an unemployed married man with two children would cost the State about £6,000 a year. That includes the loss of tax input as well at the benefits that he draws. So we are talking not only about a British product or the survival of a British car company, but about a large number of jobs.

Mr. Bruce-Gardyne: The right hon. Gentleman is indulging in the fallacy that seems to be widespread that we are faced with an alternative between the acceptance of Sir Michael Edwardes' latest version of the future and all that it implies for public finance, and closure. Those are not the sole possibilities. Some hon. Members are concerned about the reluctance of British Leyland to recognise that many parts of the business might be profitable as a going concern if they were free from the incubus of having to carry on the company's mass car division, which would no doubt continue to need longterm support.

Mr. Orme: I take the point, and I know the philosophy from which the hon. Gentleman speaks forcefully and honourably. I should like to look at the question of British Leyland in that context. There will now be four divisions, and there will be a possibility of selling one or more of those divisions. To do that would injure the whole, and it would not necessarily recoup for the taxpayer the benefits to which he is entitled when profits are made.
During an interview with Mr. Brian Walden on "Weekend World" last Sunday, the Prime Minister said that she would not rule out parts of British Leyland being sold off at a future date. We are totally opposed to that, and I believe that British Leyland is totally opposed to it. It would be morally wrong, having pumped British taxpayers' money into the company, not to give taxpayers the benefits when British Leyland starts to make a profit.

Mr. George Park: Does my right hon. Friend agree that when Conservative Members talk about selling off parts of British Leyland they ignore the integrated nature of the company and the fact that there are economies of scale? If companies are hived off, it would not be possible to have the long runs of producing components that is possible under the total Leyland banner.

Mr. Orme: I thank my hon. Friend, who has a great deal of experience in the car industry. I believe that he is correct.
It is essential that the company should survive. It would be wrong to split it up. It would demoralise the management and workers of British Leyland. It is in the British interest to make the company successful, and I believe that it can be made successful. The corporate plan that has been accepted by the Government is workable. The Secretary of State, with his reputation on market forces, would not have accepted Sir Michael Edwardes' proposals if he did not think that they were viable and workable.
When we talk about wets in the Cabinet, we are talking not about the Secretary of State, but about people such as the hon. Member for Knutsford (Mr. Bruce-Gardyne), who believes in market forces. Here, we have an indication that the Government are prepared to use public money—rightly—to sustain a firm that needs help now.

Mr. Adley: Is it the right hon. Gentleman's opinion that those who work in the denationalised section of Rolls-Royce are demoralised?

Mr. Orme: We could go over the Rolls-Royce issue again. In my opinion, what was done was wrong. But to start interfering with British Leyland, after all the traumas that it has had in the past, would be serious.
I turn now to the matter of the exchange rate, which was raised by many hon. Members, not least Conservative Members. It could be disastrous not only for British Leyland but for the private and public sectors generally if the exchange rate of the pound against the dollar were to rise to an unacceptable level. It would close many companies. The Government have a responsibility to consider what the exchange rate is doing to British industry, and to take some action in that regard. It is not only British Leyland that is on the line here; many companies, both public and private, are affected.
The Minister has referred to Rolls-Royce. We should like to have further information as to the financial arrangements for Rolls-Royce, and not least its accountability. We should like to know how the matter is to be dealt with, and whether it is to be reported to the House. A great deal of money is being voted for Rolls-Royce. Now that the Secretary of State—as with British Leyland—is taking the shares under his own control, he must be answerable to the House. There are pertinent questions which should be raised, either from the Government Benches or from the Opposition Benches, and the Government ought to look at them very closely. We shall certainly return to the matter of Rolls-Royce.
We are gravely concerned about the National Enterprise Board. We are concerned about the attitude of the Government and not least about the attitude of the Secretary of State. In dealing with the functions of the NEB, the Secretary of State said on Second Reading:
They are primarily to dispose of its assets to the private sector, which it has begun substantially to do, to manage its portfolio to that end, to use its limited and declining resources only in partnership with the private sector and only in potentially profitable high technology projects which in the present period of desperately low profitability might not be taken up by the private sector alone, and to stand ready to provide some finance for suitable small firms and regional projects.
In the same debate, the Secretary of State said that the NEB
is to manage the remaining portfolio of about 60 companies that are still in its possession, and to prepare them as quickly as possible for sale to private investors".—[Official Report, 1 December 1980; Vol. 995, c. 34–6.]


That, again, is a disastrous decision against the background of the current industrial position to sell off assets that were making a profit for the taxpayer.
There is a need for an expanded National Enterprise Board, not a reduced National Enterprise Board. The argument is set out in the TUC Economic Review 1980. I understand that a copy of it was sent only yesterday to the Secretary of State. On page 30, under the heading "A new planning framework", it states:
A body like the NEB is needed but it must be strengthened in two ways. Us scope for intervention and the finance available to it must be greatly expanded. Secondly, it must operate through a system of planning agreements and be linked to the development of industrial democracy.
What the TUC is saying is right, and I have some questions to put to the Minister or to the Secretary of State arising out of the NEB and some of the problems that it is facing.

Mr. Don Dixon: The NEB is the only means by which we can get investment in the North of England. We have the highest percentage of unemployment in England, Scotland or Wales. We have the second lowest number of vacancies in England, Scotland or Wales. We do not have a Northern development agency. We do not have a Minister for the North. We do not have a Grand Committee to deal with Northern affairs. We do not have a Select Committee to deal with Northern affairs. We have absolutely nothing. Unemployment in the North is reaching intolerable heights, and something will have to be done about it. I know that the Secretary of State for Industry has been having discussions with the Northern group of Members of Parliament. I hope that we shall very soon have some suggestions from him so that we can co-ordinate the efforts being made in the Northern region to get some industry there. At the moment, the only thing that we have is a Northern regional development board.

Mr. Orme: I thank my hon. Friend for his intervention. I think that the Secretary of State was listening intently to his remarks. My hon. Friend pointed out clearly the dilemma within our society, and the division between the North and the South of the United Kingdom. There are a few exceptions in different areas where there are small pockets of heavy unemployment, but generally speaking it is correct to emphasise that division.
Something has to be done about the Northern region; I accept that without qualification. I am arguing that the National Enterprise Board is one of the weapons that can be used, just as an investment bank could be used to help the Northern region. The Secretary of State has a responsibility to tell the House at the earliest opportunity what are his plans for the Northern region, and how it can be assisted. It is not a matter of looking at benefits, important as they are. Jobs are the major priority.

Mr. Grylls: Perhaps the right hon. Gentleman would be wrong to over-egg the pudding of hope—if I may use that expression—in regard to the NEB being able to do a lot in the Northern region. In the first five years of the life of the NEB, when the Labour Government were in office, unemployment soared in the North-East and the NEB did very little about it. It was not able to do much about it and probably is not able to do much now.

Mr. Orme: I am not suggesting that the NEB can automatically solve all these problems. It will be very difficult to solve some of the regional problems. If I may

digress for a moment, it is obvious that Liverpool stands out as a city with problems because of its geographical position and the fact that it has been left behind in the new industrial revolution, of which it has not been part.
We have learnt from the problems of the Labour Government. We realise that not enough was done; that there was not enough intervention. I am not suggesting that one agency, the NEB, is the answer to the problems of the North-East, but it could be one of the factors in helping to resolve those problems. That is why the NEB needs to be expanded.
While on the subject of the NEB and support for industry, I should like to ask the Secretary of State to comment on the position of International Computers Ltd. which is reported today in the Financial Times. The shares of that company have been sold off. Now it is in dire circumstances. Apparently the Department of Industry is not prepared to comment at the present time. The Secretary of State ought to make a statement very soon to the House—if not this evening—about the position of ICL. My hon. Friend the Member for Whitehaven (Dr. Cunningham) will have something to say about that when he winds up for the Opposition.
Many of us have received a letter today from the convener of Talbot UK at Linwood concerning the position there, asking us to bring pressure on the Peugeot-Citroen group from the Department of Industry to ensure its future. It is no good the Government talking of fetching in fresh investment if the investment that has come in is allowed to go. That is the crucial point. Will the Secretary of State, or the Minister, in replying to the debate, say something about the Talbot situation? The problem that has arisen in the North-East could occur in Scotland.

Mr. Budgen: Is the right hon. Gentleman in favour of further subsidies for the Linwood plant? If so, does he favour further support for De Lorean and for Nissan? If so, would he then be in favour of a general subsidy for all car producers? According to his philosophy, some element of equality, it seems, should be brought into this situation so that all get fair shares at the trough.

Mr. Orme: The workers who have written about this situation have not written on a philosophical basis. They are writing about their jobs, their families and their futures. They are demanding a future with jobs and saying "Give us the robots. We are prepared to work. We are prepared to negotiate." They are not asking simply for a handout. They are asking for consultation and for agreement to be reached.
I believe that the Government should intervene. I believe that the Government, together with the people who work in this plant, can play a major part in keeping it going.
The Prime Minister was asked by Brian Walden about Talbot and ICL. She replied:
If they're slap right in the Midlands or if they're slap right in a non-development area, they do not qualify under existing legislation.
Brian Walden then asked:
And they won't get it?
The Prime Minister replied:
And they won't get it. If in fact they're in the development areas they already qualify for help".
Will the Government give help to Talbot at Linwood. Will they give help to ICL? Will they try to assist in the Tate and Lyle situation in Liverpool?

Mr. Budgen: Is the right hon. Gentleman in favour?

Mr. Orme: I am in favour not just of protecting jobs. That is the first thing. I am in favour of protecting the industrial base within our society which is being dangerously narrowed. It does not matter whether one comes from the North-East, Scotland or Wales, from Greater Manchester, Liverpool or parts of the Midlands. These are problems that the Government have to face. They are not facing them. We want some answers.

Mr. Tebbit: I am not sure that I can offer the right hon. Gentleman an answer. Has he worked out how much he proposes should be spent on these matters and from where the money will be raised? Will it mean income tax at 95p or 105p in the pound by the time he has finished?

Mr. Orme: The Minister is being silly. I am saying that these matters have to be considered, and that there has to be consultation. Of course, they have to be costed. One has to do what has been done with British Leyland. But the Government have to take some action, and they are not taking it at the present time.

Mr. Tebbit: I hope that the right hon. Gentleman realises that we cannot spend the same pounds twice over. The very fact that we have invested these vast sums, or are proposing to do so, in Leyland may preclude others from receiving assistance. There is not an unending supply of resources to invest in companies that consume rather than create wealth.

Mr. Orme: There are the North Sea oil revenues. Instead of using them for tax handouts for the better-off, the Government should use them for industry.
I wish to draw the attention of the House to what has happened to the manufacturing base since the Government came to office. United Kingdom manufacturing production has fallen by 16·5 per cent., or one-sixth, since the Tories came to power in May 1979. This decline has more than eliminated all the growth achieved in the 1970s. Current levels of manufacturing production are the lowest since the 1960s. The rate of decline is unprecedented. The fall of output in the period 1979–81 is almost certain to be greater than that experienced in the slump between 1929 and 1931.

Mr. Adley: On a point of order, Mr. Deputy Speaker. Are you content that we should develop this discussion into a general economic debate?

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): We are dealing with amendment No. 5, in page 1, line 10.

Mr. Orme: I did not expect the hon. Member for Christchurch and Lymington (Mr. Adley), of all people, to try to silence debate in this House. I am talking about intervention and what the National Enterprise Board can do. We are talking about the NEB in this Bill.
The recent slump in manufacturing output is unmatched anywhere in the industrial world. Our slump is greater than that in any other industrialised nation. We cannot stand by in a complacent manner. We need action. We need intervention. We have had some intervention through British Leyland. No doubt we shall get it through the steel corporate plan in a short time. I would say to the Secretary of State and to the Government that if we are not careful we shall reach a position in which British industry will not be able to recover. When the upturn comes, we shall not have the skilled labour and the manufacturing capacity. That must be a matter of serious concern to hon. Members on whichever side of the House they sit.
I make no apology for raising these issues in the manner that I have done on the Floor of the House. Time is running short. It is time for action. It is time that this Government took action.

Mr. Grylls: In proposing this amendment, my hon. Friend the Minister of State trod a delicate path. Those of us who have advanced a slightly different view are sympathetic to the difficult decision that the Government had to take. It must have been a difficult decision for the previous Government and an even more difficult one for this Government. I hope that no one on the Conservative Benches will think that any remarks of mine mean that I propose that Leyland should be closed, or anything as ridiculous as that. There are, however, a number of us who have said that we believe that the Government should look more closely, and should still look more closely, at the possibility of an earlier return to the market of certain parts of British Leyland. That would ease the burden on the taxpayer and on Government borrowing. I do believe that there is a middle way. I beg the Government to go on looking at this matter during the time of the current Leyland corporate plan.
Many of the problems that Leyland has so far not succeeded in solving will not be solved by money. Throwing money at Leyland is not the cure-all. I appreciate that to develop new models requires money. However, far too much of the £1,300 million put into Leyland since January 1975 has gone to meet losses, and those losses have increased. I should still say the same if Leyland was moving towards profit, but it is moving towards increasing losses. The loss for the 12 months up to June 1980 was £317 million, which is almost exactly equivalent to the sum that my right hon. Friend agreed on 19 December 1979 to put into BL. Instead of going to investment, that money has gone to meet losses.
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Leyland, with the £1,300 million that has gone to it in the past five years, should have been able to produce four or five new models, which would have put it in a healthy financial position today such that it would be making a profit. I know that it is difficult, but I ask the Government to exert as much influence as they can upon BL to put its house in order by real improvements in productivity and further demanning. BL still has too many people. I do not underestimate the success of Sir Michael Edwardes in reducing BL's overall manpower without a major bust-up. However, those who wish BL well believe that he must go further. The losses indicate that far too many people are producing a relatively small number of cars, especially compared with the number in 1972, for example.
I approve of the transfer of responsibility from the NEB to the Department of Industry. BL will continue for some years to be a massive problem for the Government, and it is realistic that the major decisions should be considered by the Cabinet. However, the Government should be monitoring its performance in manning, productivity, and so on. There is concern about how that will be done. Far be it from anyone on the Conservative Benches to propose greater bureaucracy in the Department of Industry. However, if we are putting in the gigantic sum of nearly £1,000 million over two years, the company's performance must be carefully monitored. I hope that my hon. Friend will deal with that point.
Amendment No. 5 concerns the reduction in the NEB's borrowing limit. It may sound strange for me to quibble


about the reduction. However, it is largely cosmetic. The reduction arises out of the removal of BL from the responsibility of the NEB, so we are talking only of the companies remaining, most of which are relatively small. Why does the NEB still have to have a borrowing limit of up to £750 million? ICL and Ferranti have been floated off and Alfred Herbert has been put into liquidation. At the end of 1979, the total borrowings of the subsidiaries of the board were £268·5 million. I hope that that figure has not increased much during 1980. Why, therefore, does the ceiling need to be as high as £750 million?
On 20 December 1979 the Secretary of State quoted a letter from the chairman of BL, stating:
The board will monitor progress very closely, and if shortfalls in performance place the achievement of the Plan in jeopardy, then the Board consider that they will have no option but to abandon the Plan."—[Official Report, 20 December 1979; Vol. 976, c. 894.]
The 1979–80 plan has fallen below what was expected.
On 26 January 1981 the Secretary of State quoted another letter from Sir Michael Edwardes, giving the assurance that if the new plan over the next two years falls below par it will not be proceeded with. The first assurance was not worth very much. Not only did the plan continue; it was doubled in size. I hope, therefore, that the Government will tell BL that they are watching it very closely and reporting to the House during the operation of the plan. As guardians of the taxpayers' money, we should have at least some idea of what is going on.
I hope that the Government will tell BL that the House takes its letter seriously. It states:
Circumstances may arise in which, through a substantial deviation in performance or an appreciable departure from the assumptons underlying it, the Corporate Plan is clearly not being achieved and it appears impossible to bring about recovery within the timescale envisaged."—[Official Report, 26 January 1981; Vol. 997, c. 644.]
I shall not weary the House by reading on. The letter then states that BL would therefore not proceed with the plan. I hope that the Government will hold BL firmly to that undertaking. We should ensure that during the next two years BL at least meets the bench marks that it says it will. We can then be assured that it is moving towards a profitable position.

Mr. Park: Like my right hon. Friend the Member for Salford, West (Mr. Ornie), I welcome the Government's proposals to fund British Leyland and the necessary adjustments from one account to another.
The Minister gave a fair account of the reasons why the Government came to that decision, much to the dismay of some of his colleagues. He highlighted the fact that BL and its work force had increased production dramatically, had accepted moderate wage increases over a three-year period, had accepted massive redundancies and had successfully introduced a new car that on all counts is a success.
Those who ask why Leyland has not produced more new models in the past two or three years do not understand that the gestation period for a model is about five years. It is accepted wisdom in the car trade that as one new model is introduced the next must be on the drawing board or there will be trouble sooner or later. Leyland should now be given the opportunity to get on with coping with its day-to-day problems without the spotlight of publicity constantly on it, turning over the bricks to see what is underneath. Let us give it the same opportunity as the private industry to solve its problems

and become a success. Indeed, given the expression of confidence in its future I am sure that it will become successful.
When the Secretary of State made the announcement it sounded as if there had been a death in the family. As it was a message of hope, he need not have been so doleful. The same atmosphere prevails in the National Enterprise Board. One feels as if one is in the presence of a dying body. The spirit has gone out of it. No wonder! It has been chopped off at the knees, while industry languishes for lack of investment capital.
The Secretary of State now proposes to reduce the inadequate amount of money available by reducing the function and scope of the NEB. That would be understandable if private investors were lining up to invest, but they are not. They prefer to put their money anywhere but in industry. There is no shortage of money. The country is awash with money which is held by the banks and institutions, but there is a marked reluctance to put it into industry. There is an absence of that commodity that is laughingly called "risk capital". Investors do not want to take any risks. Conservative Members continually say that they want guarantees. That great entrepreneurial spirit is conspicuous by its absence.
While this situation prevails there will be no money to research and develop the products on which the future of our country depends. Government Departments seem to be falling over each other to tighten the noose round the neck of industry. Research and development cannot be carried about without skill and ability. The Secretary of State for Employment suggested that the engineering and other training boards should be funded by industry, yet industry is struggling to stay alive. The Department of Energy increased the cost of energy. As a result, companies that use a lot of gas not only have to pay more for it, but see their profits being syphoned off through the back door of taxation.
The Department of Health and Social Security suggested that industry should be responsible for the first few weeks of a worker's illness. The Treasury has weighed in and has dismantled exchange controls. It would seem that the Government are conspiring to reduce industry to a wasteland. When that expression was first used in this House it was regarded as an exaggeration. In the West Midlands, 50 people chase every job. That phrase is no longer an exaggeration, nor is its use confined to old companies. Indeed, such companies may need to be renewed and to produce new goods. But new industries, such as the electronics industry, also face problems. They cannot get the necessary funds and are being driven into the hands of receivers. That is a sad comment on the spirit of enterprise that we once had, and that I hope we shall regain.
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Mention has been made of Talbot. The hon. Member for Wolverhampton, South-West (Mr. Budgen) asked my right hon. Friend the Member for Salford, West if he wanted all the car firms to have a fair share of the trough. The decision to allow Nissan to develop in this country is fraught with difficulty. Given the present high levels of unemployment, I well understand the desire to snatch at anything that might provide jobs. I would not reject the decision to put a Nissan factory in the Midlands—not in a green field site—where people know something about making cars.
All the leaders in the car industry confirm that that industry suffers from overcapacity. If the Nissan factory is to be sited on a green field site in an assisted area, the Government will probably give considerable grants to that company. Instead of introducing this Japanese Trojan horse, would it not make more sense to give assistance to other multinational companies that are already established in Britain?
We in the West Midlands keep being told to pull ourselves up by our bootstraps. Unfortunately, those bootstraps are badly frayed and if we put any pressure on them they will snap completely. It might be possible to give assistance to Linwood because that plant is in an assisted area. Let the factory have some new equipment. The workers at Linwood, and in Talbot generally, are worried because there has been little or no investment since Peugeot took over. Linwood is still using equipment that was lifted from Coventry after it had done sterling duty producing Avengers. That equipment was lifted lock, stock and barrel and was put into the factory at Linwood. That factory has been using it for a decade or more.
The equipment at Linwood is well clapped out by now. Nevertheless, at Linwood—as elsewhere in Talbot—production levels have been maintained and improved. By general agreement, the quality is better than that found in France. A case can be made for helping Talbot, even within the guidelines that the Prime Minister laid down. If the Government could bring themselves to give Linwood such assistance, it would provide a degree of flexibility and encouragement to do something in the Midlands, in Luton, and in Dunstable, and a completely new company need not be brought in.
The Government are wondering whether the Japanese will help ICL. Everyone agrees that our economic recovery must depend on a sound capital base. A large proportion of that base must come from the Government, because the private institutions and the banks have shown a lack of enterprise as regards investing any money. Industry may be failing, but the money world is doing very nicely, not as a result of any enterprise that it has shown, but solely as a result of high interest rates and a highvalued pound.
Sooner or later we must realise that the prosperity of this country cannot depend purely on juggling with money. We must realise that there are other aspects, including the production of goods which can be sold for a profit and which will provide the money to achieve our social objectives. The Government should seriously consider all aspects of their policy which do not lead in that direction.

Mr. Hal Miller: It is always a pleasure to take up the remarks of the hon. Member for Coventry, North-East (Mr. Park), a fellow Midlander and joint chairman with me of the all-party motor industry group. I share very much the hon. Gentleman's concern about capacity and I shall turn to that in the course of my remarks.
I begin by observing that my hon. Friend the Minister of State is in an unusually sunny and civil mood, which is a welcome augury for the debate. I am tempted to wonder whether he has drawn comfort from the motto on my favourite tin of syrup—namely:
Out of the strong came forth sweetness.

I hope that it will not disturb my hon. Friend's mood if I venture to say what a comfort it is to me, as an exceptionally loyal supporter of the Government and member of the Conservative Party, to find that the party is now in step with me on assistance for BL after one or two unhappy passages in the previous Parliament. My hon. Friend may be somewhat surprised to learn that later in my remarks there will be a note of criticism of the way in which the Government disburse public money.
I welcome the Government's recognition of what has been achieved at BL, which alone gives a realistic prospect for future success, of which my hon. Friend spoke. Even more, I welcome the recognition in all parts of the company that it must be competitive to survive.
There is a success story starting to be told with the launch of the Metro, as the hon. Member for Coventry, North-East suggested. The success of that production has led already to increased employment. Even more important from the point of view of those working in the industry, it has led to a substantial increase in wages through bonus payments, which were up to £12 last week and are increasing to as much as £15 if the present rate of production is held. That shows the way forward to the high output-high wage economy to which I most certainly subscribe. I believe that that is the only sure hope for our future prosperity.
More importantly, the Metro has re-established the credibility of BL, the credibility of a company with its customers who must come first. It is no good making something if no one is prepared to buy it. That is where I take issue with the right hon. Member for Salford, West (Mr. Orme). The Metro has re-established credibility with customers, and included in that process is the successful launch of the T45 truck. Credibility with dealers is essential to the selling of the product. There must be credibility with the taxpayer as demonstrated by the Government. Most important, there must be credibility for the purpose of the company establishing collaboration with other manufacturing companies.
At this juncture I refer to overcapacity in the British industry and the structure of the industry. Throughout the world motor manufacturing is going through a sudden and sharp change that has given rise to a great disturbance in the United States and in many EEC countries. We are well aware of the difficulties of Chrysler in the United States. The conditions imposed by the United States Government for the injection of public funds and the guaranteeing by the Government of borrowings are considerably more severe than those that have been imposed on BL.
There is a great change taking place in the world motor industry and it is impossible to buck the trend. I know from my own constituency over the past 10 years how the wages of car workers have suffered. When I first went there—the hon. Member for Birmingham, Stechford (Mr. Davis) will happily recall his first win—car workers were the highest paid workers in Britain engaged in volume manufacturing. At present they are the lowest paid in that sector, despite the efforts of the many Governments who have been in office over the past 10 years and the various policies that have been followed. As I have said, there is no way of bucking the long-term trend of the contraction of the industry and the need to re-equip it with the new and different cars that customers are prepared to buy.
Some collaboration will be essential for the survival, let alone the success, of BL and for the future of motor manufacture in Britain. I have been insistent on


collaboration in the House for the past four years. There was general agreement in a debate on the Consolidated Fund Bill in 1979, and I am glad at last to see recognition of the need to collaborate both in the company and in my hon. Friend's remarks. We must take account of what is going on in the rest of the world.
I turn to the Nissan deal and Japanese imports. On the tapes this afternoon as I was entering the Chamber there was a report that the JAMA-SSMT talks in Lisbon had broken down without any guidelines being agreed. My understanding is that an agreed statement was issued at the conclusion of the talks that most significantly referred to the adoption of even more prudent marketing in the current year. It contained the welcome indication that there would be quarterly reviews of not only the state of the market in Britain but of shipments from Japan. That is most important because we are to put £1 billion of taxpayers' money into a company without taking any action to ascertain whether there is a reasonable market for the ensuing production.
I have been involved in free trade long enough. I used to be responsible for trade relations in the Hong Kong Government, so I understand something about free trade. However, we do not enjoy free and fair trade in motor vehicles with the Iron Curtain countries, with Japan or with countries such as Spain. To allow our investment to be endangered by unfair trade seems to be without any logic and to be lacking even in political good sense.
I raised certain doubts following the statement on the Nissan deal which in subsequent discussion with the industry have been reinforced. There must be some concern about the nature of the project. It was stated that there would be the production of 200,000 cars a year. That is nearly half the worldwide production of BL cars at present. Where is the market for this one model? One can imagine the effect that that will have, let alone the introduction of a second model, which must be envisaged from the size of the site that is required. It seems far from clear that our fellow members of the Common Market will accept these cars, especially when there is as yet no clear undertaking on the volume of imports from Japan into the EEC. If these cars are not to be exported freely, that must gravely jeopardise not only companies such as Talbot, which the Member for Coventry, North-East mentioned, but the whole of the public investment put into BL. Indeed, if there were that willingness by an outside investor to produce a new model, presumably the same size as the LC10, in comparable quantities, some of my hon. Friends might well ask why the Government are putting money into BL to produce it at all.
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I am trying to be brief, but this is a most important subject. I turn to the need for some clear industrial policy. "Strategy" is perhaps rather a grand word. I believe that there must be very grave concern about the continuing availability of support for anybody who wishes to establish a car, lorry or bus plant in this country. Apparently, so long as he goes to a development or special development area, such a person is eligible for assistance—never mind with whom he is competing, what is the basis for the competition, or whether he intends to use any components made in this country at all.
My hon. Friend the Member for Surrey, North West (Mr. Grylls), the chairman of the Conservative committee on industry, referred to monitoring. I am not at all satisfied

that monitoring will be improved by moving BL from the NEB to the purview of the Department. Indeed, I am not happy about the prospect that there might be political interference and further detailed questioning which the right hon. Member for Salford, West seemed to intimate might arise. Certainly, many of us in all parts of the House might wish to start poking our noses into detailed questions, which I think that my hon. Friend would find it very hard to resist now that he has assumed direct control.
I return to the question of monitoring. How is the undertaking given by Nissan in respect of components to be monitored? One does not need to be very familiar with the industry to see the possibility of a claim that no components of suitable specification, size or delivery were available being used to avoid whatever undertaking or understanding might have been arrived at on a Government to Government or Government to Nissan basis. This is a most important matter. Unless the Nissan plant has free export into Europe and uses a very substantial quantity—I set it as high as 80 per cent.—of United Kingdom or EEC components from the start, I see very little prospect of there not being substantial derogation from the viability of the new LC10, and it must surely lead to the closure of Talbot and other multinational assembly plants in this country.
I differ from the hon. Member for Coventry, North East on this point. My understanding is that the Government assistance is available to Talbot at the moment if Talbot or Peugeot showed any interest in putting in an additional plant. But I do not see how Opposition Members can argue that there should be more Government investment in a Talbot company which the owners themselves do not even wish to be made. I have tried to suggest that the future lies in fewer models in much greater volume. That decision must be for the Peugeot company itself to make.
On the need for industrial policy, may I briefly express concern about diesel engines, in view of the degradation of fuel that is already taking place and the prospects for exports if rougher, cruder fuel cannot be used for our engines. In the United States, General Motors has already stated that it thinks that up to 80 per cent. of small and medium passenger cars will be diesel-fitted by the end of four years and has just dedicated two entire plants to that purpose. It is not clear to me from the BL plan that there is to be any development of that sort here. I believe that that is a very necessary subject for the Government to inquire into in their discussions with the firm, and relating also to Perkins.
In conclusion, I welcome the announcement made last week and the Government's decision, while registering my concern that there is not an adequate framework of policy to support it. Indeed, I believe that the funds could have been more limited and more conditioned than they were. I welcome the fact that the lie is being comprehensively given to rumours spread by political opponents in the Midlands that the Government cared nothing for the future of the industry or of that region. But most of all, I welcome the confidence that has been given to everybody working in the industry, to the customers and to the dealers.

Mr. Maxton: I wish to follow briefly the remarks of the hon. Member for Bromsgrove and Redditch (Mr. Miller) and to make one point about the Talbot operation, in terms of Linwood in particular. The hon. Gentleman asked why the Government should give money to Talbot


when Talbot is not even asking for that money. Those of us who have taken any interest in the Peugeot operation, and the change to Talbot as opposed to Chrysler, are well aware that Peugeot does not really wish to continue manufacturing in this country. Its interest in taking over the Chrysler operation was to obtain the sales franchises and outlets rather than the manufacturing capability. But that, of course, is neither the concern of the Opposition nor, I am sure, that of the Government.
We are concerned about the problem of employment. I am especially concerned about Linwood, as many of my constituents work there. We are concerned about the effects that the closure of the Talbot manufacturing operation in Britain would have upon employment, particlarly in the West of Scotland, where the roll-on effect would be disastrous in an area already suffering nearly 15 per cent. unemployment.
I therefore hope that the Government will take every possible measure to ensure that the agreements reached between the Labour Government and Chrysler, and the later agreements reached when Peugeot took over, are maintained and fulfilled, and that if extra money is required to maintain that operation, it will take place and the money will be given.
I turn to a comment made by the hon. Member for Bromsgrove and Redditch and by my hon. Friend the Member for Coventry, North-East (Mr. Park) about the Nissan operation coming to this country. I share many of their reservations. But before finally making up my mind about whether the Nissan operation is a good one or not, I should like a clear answer from the Minister to the question put by the hon. Member for Bromsgrove and Redditch about the quantities of United Kingdom components to be used by Nissan. The hon. Gentleman referred to United Kingdom and EEC components, but I would limit it to the United Kingdom. Furthermore, I should like to know what guarantees the Government have obtained from Nissan that it will use British steel in its operation and will not import steel either from Europe or, less likely perhaps, from Japan. We should certainly have some kind of guarantee from the Government that it is not just a matter of the immediate employment of some workers by Nissan—which would probably have a roll-on effect and cause further unemployment elsewhere in the car industry, as a result of which there would be no great benefit—but that there will be employment benefits in the steel and components sectors as well. I hope that the Minister can give answers to those questions.
Like my hon. Friends, I welcome what the Government are doing for British Leyland. As my right hon. Friend the Member for Salford, West (Mr. Orme) said, the collapse and fold-up of British Leyland would have the most disastrous effects on unemployment. We can all bandy figures around, but it is clear that such a collapse would have a massive and direct effect on unemployment which would continue for a long time.
I assure hon. Members that in the West of Scotland shops are now being boarded up, because income levels have dropped so dramatically in the area that they can no longer sustain themselves and are no longer viable. They too, like manufacturing industry, are laying off staff, as a result of which unemployment rolls on dramatically. It would do so even more if there was a collapse of the size of British Leyland.
Some Conservative Members have criticised the Secretary of State for giving this aid. I advise them "When the high priest of your religion shows doubts about his religion, even if only in his actions and not his words, perhaps it is time that the acolytes considered whether that religion is right." It is not the wet in the Cabinet who has come forward with this proposal, but someone who until recently clearly set his face against State intervention of any sort. He has always relied on, and been given, the support of Conservative Members who are now expressing opposition to this move.
I shall conclude, even though, Mr. Speaker, I rarely have the privilege of speaking in the Chamber when you are in the Chair. We should like to know a little more about the Government's long-term intentions for the NEB. Along with the SDA and WDA, the NEB is undoubtedly suffering from a feeling that it is not getting Government support. It feels that the Government do not believe in what it is doing. It is, therefore, much more difficult for the NEB to continue its work.
These amendments limit the NEB's ability to finance industry. Only through Government intervention and investment in industry will we see the turn-round in the British economy which is required. I hope that the Minister will tell us how he envisages the future role of the NEB, bearing in mind the limited investment which the Government will allow it.

Mr. Hill: I sympathise with my right hon. Friend the Secretary of State and my hon. Friend the Minister of State, because they have been put in the unfortunate position of having not only a genie on their backs, like Sinbad, but several albatrosses as well. In fact, the whole Department of Industry must from time to time be shaken to the core by the demands of the nationalised industries for more and more money.
I realise that the decision which has been made in respect of the BL corporate plan, the decision that will have to be made on the corporate plan of British Steel and many other decisions, have been reluctantly forced upon the Government. The hon. Member for Glasgow, Cathcart (Mr. Maxton) said that the high priest of Conservative economic policy had changed his mind. It would have been as well had the hon. Gentleman kept quiet. The country is in a terrible situation as a result of bad labour relations in the past. Between 1974 and 1977, British Leyland lost more than 1 million cars in production, which means a loss from possible profits of between £2 billion and £3 billion.
British Leyland has put forward a corporate plan which is probably more simplified than the one put forward some time ago. Indeed, we all wish Sir Michael Edwardes, his labour force and his management team, every success because this is one obligation that we shall not be able to ditch; nor would we wish to do so. All we want is proper accountability. We want to ensure that Sir Michael Edwardes keeps to his promises. We sincerely hope that the £1,500 million which will be earmarked for British Leyland will be sufficient to return the company to profitability.
I wish to refer mainly to the NEB. At times, it has been maligned. Certainly, the previous chairman, Sir Arthur Knight, took much stick. He did his best in difficult circumstances. The new chairman of the NEB now has a much simpler task.
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The Bill wipes out the NEB's "overdraft figure" of £40 million. It also gives it a new obligation in respect of small businesses. It can advance up to £50,000 to each small business. Sir Arthur Knight must have started this chain of thought, because once when I met him he was concerned about the fact the small businesses were hunting for finance mainly in the area of £50,000 or less. At that time, few banks were assisting high-risk business, high technology in particular. Therefore, the NEB has a new role to play in this regard.
The hon. Member for Coventry, North-East (Mr. Park) said that he thought that the Secretary of State had chopped off the NEB at the knees—[HON. MEMBERS: "He has chopped it off at the waist".] He has done quite the reverse. He has given it a new breath of life. It is now starting as a completely new business with its overdraft cancelled. Again, although the new NEB board will have a smaller commitment, we hope that it will be able to return some of the 60 companies under its control to a profitable position so that they can be sold in the market place. We hope that the board will work towards the day when it will have no further obligations within those 60 companies.
I still maintain that the NEB will have a minor role to play in the future in supporting small businesses. Until the merchant banking system and the clearing banks take up the slack, there will be a role for the NEB in order to assist small businesses.
There has been a great deal of talk concerning jobs. Of course, one man's job is another man's unemployment. If my right hon. Friend gives £1,000 million to the Midlands, one must ask whether he can spare further money for an area such as Southampton. Although the Southampton area has not suffered from great unemployment, unemployment there is certainly growing, and we should bear in mind that an area such as mine, through its taxpayers, will have to bear some of the burden for that £1,000 million. Therefore, we should always be compassionate for other hon. Members whose areas are not enjoying the fruits of the latest distribution.
I am particularly concerned about jobs for the young, and feel that the direction of those youngsters is being neglected. Clause 6, though small, is significant. In embryo form, it does what I am sure the House wants. It states:
The Secretary of State may make such grants or loans to any body, as he considers appropriate for the purpose of assisting in—

(a) the promotion of the practice of engineering; 
(b) the encouragement and improvement of links between industry, or any part of industry, and bodies or individuals concerned with education; 
(c) the encouragement of young persons and others to take up careers in industry, or in any part of industry, and to pursue appropriate educational courses." 

In Committee we discussed this very thoroughly when we were discussing the role of the NEB. If we are in the future to have a viable British Leyland and a viable Rolls-Royce, and if we are to compete with the Community or Japan—we seem to be becoming more blood brothers than competitors—we must redirect more money into the education of youngsters in the engineering field.

Mr. Maxton: If the hon. Member cares to read the explanatory and financial memorandum on clause 6 he will see that the Government intend to put no extra money whatsoever into this area.

Mr. Hill: I did read that and I made the point that it would be hard to contain any programme of education within a £1 million allocation. Indeed, I mentioned that there would have to be liaison between the Department of Education and Science and the Department of Industry and that £1 million would not be sufficient, but obviously it would be possible for other funds from the NEB perhaps to be redirected into clause 6. That would be a matter of interdepartmental accounting. I agree, though, that we have a problem here inasmuch as we now have a Bill spending in the next five years £5,250 million. It is increasingly difficult for Conservatives in my area who are not enjoying any of these rather good subsidies to be able to reconcile that with the fact that we have to cut back in other areas.
I am sure that within a very short time British Leyland will become profitable. I am increasingly worried about Rolls-Royce, because we have not had any statement of accounts and we have no way to judge how the £2,000 million will be spent. Nevertherless, I am sure we will have that explained thoroughly at the end of the debate. From being a very reluctant opponent of the Bill—certainly in Committee I had some moments of great regret that I seemed to be the only one in the room who was not agreeing with the Secretary of State and with the Opposition spokesman; it seemed to me a very lonely place—I realise that perhaps I was over-reacting and that the albatrosses that my right hon. Friend the Secretary of State has to bear have to be borne by all of us. I am sure we all wish Sir Michael Edwardes and the new chairman of the National Enterprise Board well. If we have to come back to discuss this matter in a year's time, I hope that there will be more light at the end of the tunnel.

Mr. David Penhaligon: I think we have underestimated the sum we are talking about here today. The £1,000 million for British Leyland could probably build a motorway from Land's End to Birmingham, although I cannot think of any logical reason why one should be built. It represents £1 a second for the next 30 years, an incredible sum of money for British Leyland. There can be no doubt about that. Given the position in which the Government find themselves, their decision to back this recovery plan must be right. The position has been caused partly by the Government's policies leading to rising unemployment and doubt about the industrial fabric of this country.
The number of interventions made by hon. Members representing areas protesting most about high unemployment has been noticeable. I represent a constituency in which there is over 16 per cent. male unemployment. Yet, unless one takes the most remote parts, not one farthing will actually go to areas like mine. I am not against help being given, but it is worth making the point that this very large sum of money will probably not go to the areas to which one would direct it if one had £1,000 million with which to do something about unemployment.
I am not as optimistic as many that the plan in itself will succeed. I take the view that unless there is a substantial change in the current international value of the pound the plan will fail. I go farther than that to express the view that the Government should concentrate their mind on what we can do as a country in order to reduce the international value of the pound. For many years we have maintained exchange control on our currency in order to try to keep the value of the pound at a reasonable level. I can see no


reason why controls like that could not be reversed. I still find it incredible that we do not differentiate between money coming into Britain for real investment, of which we would all approve, and money coming in just to take advantage of the relative security given by our North Sea oil asset and high interest rates on gilts and such like.

Mr. Tebbit: I am interested in the hon. Member's views on exchange control. Does he think that exchange control, when it was used to try to keep the pound up to $2·80, was successful? If not, why does he think that reverse exchange control would be successful in keeping the pound below $2·40?

Mr. Penhaligon: It clearly was not successful in that in the end the pound had to be revalued. There are a number who would argue that we might have been better off if we had recognised reality a little earlier on that occasion and allowed the pound to change its mind. There is no doubt that exchange control had an effect. It had the effect of holding the pound at a generally higher level than it might have been otherwise. I see no reason why such controls could not be operated in reverse at the moment.
The problem that Britain faces is that we are the only industrial country of any significance in the world that has suddenly got an oil surplus on its hands. Most of this debate today about British Steel and about the whole of the industrial decline which is taking place in all our constituencies shows the miserable failure on our part to grapple with the economic consequences of the oil phenomenon. People overseas can see that we are one of the few industrial countries not directly affected by international increases in the price of oil. They therefore think that this is a safe haven in which to put their money. The relative exchange rate shift that has taken place because of that is what we are discussing today. At least half of this money required by British Leyland has been due solely to that fact.
The second reason for my lack of optimism about the long-term recovery of British Leyland is industrial relations. A lot has been said, fairly, about the massive improvement that has taken place. I have spoken of the current management methods of British Leyland as "12 bore management" in that, in effect, it is continually saying to the work force that if it does not co-operate with this plan, sensible though it might be—I am not sufficiently involved with the company to know one way or the other—it will shoot the work force with a 12 bore gun.
If this recovery is to take place the day must come when such an argument is no longer credible. We all want British Leyland to make substantial profits. The hon. Member for Southampton, Test (Mr. Hill) expressed great confidence that that day may well arrive; we must all hope for that. If we are on the way to that situation the argument can no longer be made that if there is a strike next week that will be the final straw that will break the camel's back and that the company will go under. There is no reason to believe that there is a real change in attitude in the large British Leyland factories sufficient to give us confidence that the problems will not reappear the moment the company gains some credibility and financial stability.
I see no reason why bits cannot be sold. I reject the official Opposition's argument about the size of British Leyland. I recall that the economy of size argument

created British Leyland in the first place. I am not wildly impressed with its record in the last five or 10 years. I see no reason why the management should not be able to acquire a small car outfit. Equally, I see no reason why such enterprises cannot be sold off.
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I do not criticise the Opposition's desire for the Government to be involved in saving industry. However, their attitude is that never, in any circumstances, will they get rid of anything which they have acquired. That can only result in the Government eventually owning the entire industrial network. I am not in favour of that. Although I believe that the Government have a strong role to play, I do not wish to see that role used greatly to increase Government-owned industrial fabric. I see no reason why a part of British Leyland should not be sold if a customer is available.
I wish the company well. We would do more for British Leyland, more for industry in my constituency and throughout the land if we concentrated on what we can do about the international value of the pound. I have outlined a number of options before. We could influence the international value of the pound. Some actions would be more effective than others. There is no point in denying the possibilities. I do not doubt that we could influence the value of the pound. That would do more to help industry than throwing pound notes at windmills—which seems to be the Government's current policy.

Mr. Bruce-Gardyne: A wonderful thing about the latter-day Liberals is that they cannot see anything without yearning to control it. They are the most illiberal phenomena in the House. They want to control wages, prices and the exchange rate. When we tried to control the exchange rate upwards that was not successsful. If we try to control it downwards I doubt whether it would be any more successful.
We could achieve a substantial fall in the exchange rate in one way by convincing the international currency markets that we have decided to abandon the struggle with inflation and to lie back and enjoy it. Then the exchange rate would not only move down; it would move out of sight.

Mr. Penhaligon: Does the hon. Gentleman believe that one of industry's problems today as compared with two years ago is the escalating value of the pound? Does he accept that if there was a tendency for it to go down many sectors of industry would be helped to make a recovery?

Mr. Bruce-Gardyne: That is probably true. I am concerned about the practicability of achieving that objective without abandoning the goal of abating inflation. I do not believe that it can be done. I know to what we should give the greatest priority. However, we must not go too far into the arcane mysteries of the exchange rate.
I did not agree with everything that the right hon. Member for Salford, West (Mr. Orme) said. However, I agreed with him that the House must have a full account from the Secretary of State of the performance of Rolls-Royce. A daunting sum is to be allocated to British Leyland. An equally daunting sum is to be allocated to Rolls-Royce 1971 Limited. The evidence of Rolls-Royce's progress towards viability is no more tangible or visible than that of British Leyland.
As far as we can tell, the Rolls-Royce strategy has been to announce the orders that it gets. Whether the orders are profitable is neither here nor there. In view of the sums which once again the House is being asked to give to Rolls-Royce, I hope that my right hon. Friend will expand on the company's progress, if such it can be called. We need more information before we can be expected to vote for the sums in the Bill with equanimity.
I turn to what the right hon. Member for Salford, West jeeringly described as the breathing space for BL. It must have the most expensive diaphragm in history. There has been a fair amount of talk about BL's performance. Although Sir Michael Edwardes informs us that BL's productivity is in accordance with the plan, last year vehicle output per man-year fell once again. Even more fundamentally preoccupying is the cash limit overrun which Sir Michael warned would call in question the 1980 plan, so-called in his celebrated letter to my right hon. Friend in December 1979. It was avoided at the expense of the cancellation of essential capital investment. In other words, the ice was just about ready to hold although at the expense of what the future might offer.
I wish to comment on the exchange rate in the context of BL's corporate plan. If the daunting sums which the House is asked to approve are to be financed from an expansion of Government borrowing in 1981–82 and if that borrowing is not to be achieved by the simple expedient of printing it, interest rates will go higher than they would be otherwise.
The relationship between interest rates and exchange rates is not predictable and sometimes it is perverse. However, in time I suspect that if interest rates go higher the exchange rate is likely to be higher than it would be with a lower rate of interest.
If that is so, what we are doing has a certain element of circularity about it. We are told by Sir Michael Edwardes that the rock on which his attempts have foundered up to date is the wholly unexpected and intolerable level of the exchange rate. Therefore he must have more money. The consequence of his having more money could easily be that he will have to watch the rock on which his plans have foundered growing higher and higher in front of him.
We should like an indication tonight—I put it no higher—of whether the Government regard the exchange rate suppositions which BL has written into its plans as being consistent with Government thinking. My hon. Friend gently chided me for calling upon the Government to speculate, as he put it, on the foreign exchange markets. He suggested that those of us who occasionally dabbled in newspapers had not shown much ability in that form of speculation in the past. I freely concede that many of us have had these matters wrong.
It is not entirely a question of speculation. BL has presented a corporate plan which makes a crucial assumption—a significant drop of about 20 per cent. at current rates in the exchange rate over the next four years. Does that coincide with the Government's thinking or intentions? I hope very much that it does not, but it would be helpful if my hon. Friend would comment.
I should like to mention the alternatives to what the House is being asked to approve tonight. My hon. Friend said that breaking up BL—the sale of potentially quickly profitable parts of the business—would not be in the interests of BL and would not assist its search for international partners.
Some of us are concerned about the interests of those other parts because we suspect that the future of businesses such as the bus and truck division, the special products division and the quality car division may be more encouraging away from British Leyland than when cobbled together with the mass car division. It is quite wrong of the right hon. Member for Salford, West (Mr. Orme) and others to imply that we have an exclusive choice between acceptance of Sir Michael Edwardes' plans, with the massive finance that they imply, or 400,000, 750,000 or 1 million on the dole.
Those of us who suspect that the case for what I call disaggregation—it: is an ugly word but I cannot think of a better—of the company has not been given the consideration that it deserves, recognise that for many years we should need to sustain the mass car part of the business for a number of years until we can see what the future for that part of the business might be.

Mr. Hal Miller: Does not my hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne) agree that it is quite possible that individual sections of British Leyland sold off in that way could attract more investment than it is possible to give them from the public sector but that there is a difficulty about the timing of the sale, especially now? Would not the board be a better judge of that than the Government?

Mr. Bruce-Gardyne: I have a great deal of sympathy with the points that my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) has made. I entirely agree with my hon. Friend that the prospects for investment might be much better outside British Leyland. That is a sound point.
I should be more confident about leaving the timing to the judgment of Sir Michael Edwardes if I did not have the impression, like some of my hon. Friends, that Sir Michael Edwardes is determined to hang on like a limpet to the business. The present timing might not be ideal, but I am concerned that we appear to have succumbed to the proposition that it is a choice between almost unlimited finance or closure. I do not think that the choice is as crude, simple and basic as that.
I turn briefly to the extremely bizarre nature of some of the pronouncements, or leaks, that we have had in recent weeks about Government policy towards the motor car industry. My hon. Friend the Member for Bromsgrove and Redditch is a great enthusiast for an industrial strategy. Having watched from the sidelines the industrial strategy of the Labour Government, culminating in the wizard plan to give away a bunch of ships to the Poles as a disguise for lending them money that was needed to prop up their exchange rate, I have a measure of scepticism about industrial strategy. I do not think anyone would accuse my right hon. Friend the Secretary of State for Industry of indulging in anything along those lines with the motor car industry.

Mr. Hal Miller: One part of the policy that I was suggesting would enable the Government to assess the needs of cash-hungry nationalised industry against what is available and needed elsewhere, and perhaps to give it less money. I was not trying to open the purse strings to every thing in sight. I was suggesting a policy against which the applications could be judged, as I suggested in the case of Talbot.

Mr. Bruce-Gardyne: I was not accusing my hon. Friend—I should not dream of doing so—of suggesting that he would wish to open wide the coffers. I was making the point in passing that I am sceptical about the extent to which our right hon. and hon. Friends and the hardworking, painstaking civil servants who serve them are industrial strategists of the first water. That is not a charge that could be levelled at the Department of Industry.
On Monday last week we were told that British Leyland would receive another £1,100 million. We were also told last week that the Northern Ireland Office was proceeding after all, having said it would not, to consider Mr. De Lorean's latest bid for another £10 million to pay his wage bills. The curious fact is that Mr. De Lorean wishes to compete with BL. One may have legitimate doubts about the likelihood of his ever doing any such thing, but that is what the £67 million he has received to date, and the £10 million he is apparently now demanding on account, are supposed to go towards.
Within 24 hours of that we had newspaper confirmation that my right hon. Friend the Secretary of State for Scotland was waiting, with an ever-open cheque book, for the representatives of Peugeot to discuss the financial implications of—perhaps I should say their price for—continuing operations at Linwood to compete with BL.
On Thursday we were told that Datsun was on its way. When my hon. Friend the Minister of State made the announcement he said that he was surprised that I took an apparently churlish view of the arrival of this great private enterprise concern committing its investment to our shores. I would not take any such churlish view if that was what it was doing. We all know, however, that it is looking at development areas and special development areas because it can get grants running to between £50 million and £70 million automatically and on the nod, without control being exercised by this House.
That is not the end of it. It can also get support under sections 7 and 8 of one of the previous Industry Acts of this long and sorry series. I should be amazed if Datsun ended up with less than £100 million of taxpayers' money. To do what? To compete with BL, Peugeot and De Lorean. How long will it be, if Peugeot is satisfied, before Vauxhall comes along behind? So it goes on. I am in favour of competition, but competition in subsidy seems to me to be a contradiction in terms.
I hope that my hon. Friend will be able to give some indication of what assurances we have had that Datsun will be allowed to sell throughout the European Community the products of a factory it establishes in this country. We shall need such assurances. As my hon. Friend the Member for Bromsgrove and Redditch pointed out, if Datsun cannot get into Europe the implications for BL in the United Kingdom market must be dire indeed. Of course, it is said that we are all part of the Common Market and why should not Datsun be able to get into Europe? The reason is that our French partners already regard this country as the soft underbelly of the Community through which every aspiring Japanese enterprise can enter.
I should like to be assured that we have already ascertained to our full satisfaction that no obstacles will be placed in the way of exports by Datsun to France and Italy. I should like to be assured, and I am bound to confess that I should be mightily surprised to have that assurance.

Mr. Terry Davis: I welcome the Government's decision to make this money avaiable to BL. It is the right decision, not only in the interests of the workers in BL and of the West Midlands region, but in the interests of the country as a whole. When the hon. Member for Truro (Mr. Penhaligon) complains that not a penny of the money will benefit places like Cornwall it is time that he was told that he is wrong. Put bluntly, unemployed car workers will not be going on holiday in Cornwall.
I welcome the decision, although, for reasons that I shall explain, I regret that it is necessary for the Government to provide so much money for BL. I welcome also some sections of the document recently made available to us—the review of BL's performance in 1980, and the BL 1981 corporate plan. I especially welcome the table showing the improvement in productivity. The hon. Member for Knutsford (Mr. Bruce-Gardyne) complained that productivity had declined in 1980. The document makes clear that it would have improved if BL had been operating at full production. The hon. Gentleman will see from the paragraph that precedes the table that the reason BL was not operating at full production had nothing to do with industrial disputes, but had everything to do with the fall in demand. The reduction in the car and truck market was responsible for the decline in productivity in BL last year.
This document is in some respects a better document than that which was presented to us a year ago. That is because it is not such a mixture of figures. At least this time we are given comparable figures on a full year, or, at worst, on a half year's results. We no longer have a mixture of figures comparing a full year with periods of six months, nine months or some other duration. However, the document is still not good enough, and I repeat the criticism I made last year about the way in which the information is presented to the House of Commons.
In order to appraise the performance of BL in 1980 we need to compare the full year's figures with the figures for previous years. We also need to compare actual performance with the budget or target for 1980. I accept the point that has been made by successive Ministers in the past that it is not reasonable for the House of Commons to expect to be given the detailed budget and targets for BL or any other nationalised industry for the year ahead. I accept that that involves commercial confidence. However, I see no reason why we should not be told the target figures which the BL management put to the NEB and the Government a year ago for 1980 so that we could see the extent to which those targets were achieved or missed. In appraising the performance of a nationalised industry it is essential that we should compare achievement with aims.
I was disappointed, therefore, that in his immediate reaction to my earlier intervention the Minister indicated that he did not think that it would be appropriate to have another debate about BL this year. I was not, however, surprised that he wanted to avoid such a debate. It is clear in the document that BL's failure to meet its targets for 1980 had nothing to do with industrial disputes. Many Conservatives will not want to debate BL in that context. BL's failure in financial terms in 1980 was the Government's fault. It is clear from the document, comparing what was said a year ago, that the failure, which gave rise to the need for the Government's investment, arose from the high exchange rate and its effect on the car market, especially the share of that market


taken by imports during 1980. It is not surprising that the Minister of State wants to avoid that fact coming out. I only hope that he will reconsider his decision and not seek to avoid that point so that when the full year's accounts are published we shall be able to debate them. If we do not have a debate on the Government's initiative, some of us will make sure that we try to raise the matter in one or other of our Adjournment debates. The poor performance of BL in 1980, as the Minister admitted, was due to economic factors that he described as being largely outside the company's control. That needs to be stated firmly in the House.

Mr. Michael McNair-Wilson: I congratulate my hon. Friend the Minister of State on his appointment to that high office. I very much appreciated the robustness of his remarks. It could not have been easy for him to make such a speech this evening. He faced a singularly difficult situation and took what I believe to be the only course open to him. I also appreciated the honesty with which he spelt out the three choices which the Government felt they had to consider on the future of British Leyland.
The Minister said, about the British Leyland corporate plan, that the Government accepted it because there was no point in second-guessing British Leyland experts and their predictions. That was a fair statement because—I hope that the Minister will forgive me for saying this—the Department of Industry has been singularly unsuccessful over the years in monitoring the expenditure of public money on great projects.
Whether we cast our minds back to the Concorde saga when the original estimated cost of £80 million to the British taxpayer rose to £700 million, whether we think of Harland and Wolff, De Lorean or any other nationalised industry, we know that so often the House has been invited to consider a fairly low figure to start with and has ended up by seeing that figure double, treble or quadruple until many of us have wondered when the ceiling would be reached. It is a curious irony that, of all the nationalised industries, only one has been made bankrupt by a Minister of the Crown. That Minister was the right hon. Member for Bristol, South-East (Mr. Benn), who put the Beagle aircraft company finally to death.
I make that point because I wish to establish the importance of monitoring at the beginning of my remarks. My hon. Friend said that when the British Leyland corporate plan was considered, he would not second-guess its predictions. Therefore, in effect, he was asking himself two simple questions. First, can we accept the unemployment that might arise if we do not provide the money, and, secondly, what chance is there of success? In reaching his conclusion, what source other than the Department did my hon. Friend and my right hon. Friend the Secretary of State turn to for their information? Did they make an in-house calculation whether the British Leyland corporate plan could be accepted as it stood?
I claim no expertise in the car industry. Therefore, I claim no ability to read the corporate plan and to ask all the right questions. But I suggest that there must be institutions with such knowledge which could have advised the Department in such a way that, instead of it saying that it did not feel that it could second—guess those predictions, we could have been told that those predictions

had been considered and monitored and changed according to the advice given. If that is not the case, I suggest that that is an area which all Governments must get right.
After all, nationalised industries have been with us for at least 40 years. We have a collection of 24 nationalised industries—or about 40 if one counts each water authority as a separate industry. The time has surely come when the Department responsible for those industries should have a monitoring technique which it could bring to bear to insist that those industries meet disciplines which are not entirely dissimilar to those in the private sector. Those disciplines should lay down criteria for those who run the industries, and those criteria should be backed by penalties. Without this we shall be in the open-ended situation were faced with Concorde. Whether or not the British Leyland corporate plan is successful, there is no possible assurance that my hon. Friend can give tonight that this will be the last money that this company will receive.
The House is carrying out its two central functions in voting legislation and Supply tonight. Without monitoring and performance criteria it is at the mercy of believing and trusting in Sir Michael Edwardes and those around him. I doubt whether many hon. Members do not respect Sir Michael Edwardes and do not believe that his judgment is commercially sound. Because I hold that view I hope that the co-porate plan will prove to be the blueprint for the success of British Leyland. Nevertheless, the central point about monitoring remains un-established. I believe that more thought ought to be given to it.
I now wish to make a second point on monitoring. I used to be a member of the Select Committee on Nationalised Industries. I am sorry that that Select Committee no longer sits. I do not suggest that its members had specialist knowledge, but we began to acquire that knowledge. Since the new set of Select Committees was created, no nationalised industry has come before a Select Committee to be investigated in depth. As far as I know, none of the annual reports of those nationalised industries has been considered by any Select Committee.
The House should not tolerate that situation if the nationalised industries quiver is to remain as full as it is. Therefore, I strongly recommend to my hon. Friend that thought be given to recreating a Select Committee with the specialist task of monitoring the performance of nationalised industries.
I shall underline my point about monitoring with some remarks which I heard last night from those who are responsible for Rolls-Royce 1971 Limited. I asked them about the profitability of the company, reminding them that today is the tenth anniversary of the company's bankruptcy and nationalisation. I asked them why Rolls-Royce had not achieved the profitability which we all hoped would spring from that rescue operation. I was told that Rolls-Royce 1971 had on occasion made profits, could have made more profits, but had decided to put its resources into research and development on new engines and exploiting the quality of its engines.
On whose decision was that attitude struck? Does the managing director of Rolls-Royce have no need to answer to the Government for his annual report? Is it for him to say that the taxpayer shall not have a return on his investment and that he shall put the taxpayer's money into the projects which he favours? If so, I press my hon. Friend to say to which disciplines the chairman of nationalised industries are asked to respond. What


pressure is being put on them to ensure that profitability becomes their first priority? Profitability is the return to the taxpayer on what he or she has invested.
We all know—because the House spends most of its time discussing it—where the resources provided by the taxpayer should go. I am not anxious to support those chairmen who believe that they can turn their backs on the taxpayer because they have him across a barrel, and who decide that they can spend the taxpayer's money as they choose without the accountability which any other chairman of any other sort of enterprise would have.
I turn now to the selling-off of BL's assets. We know from the corporate plan that what are described as the non-mainstream assets are to be sold off over some years. I have one of those non-mainstream assets in my constituency—a company called Prestcold, which has just been sold for £10 million—so I appreciate the strength of that argument.
However, as my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) pointed out, and as the Transport Bill points out, in returning four of British Rail's subsidiaries to the private sector the nationalised industry which is not creating profits is unlikly to have the investment required for all its subsidiaries. It is the subsidiaries, their employment prospects and their profitability which suffer with a net loss to the State overall.
Sir Michael Edwardes in his corporate plan does not tell us what he considers to be non-mainstream activities. For instance, I wonder whether Alvis, which makes armoured cars, can be construed as such an organisation and whether it is felt necessary to keep it within the BL family.
Whether that be so or not, if there is a buyer for one of BL's subsidiaries, whether in the vehicle or any other sector, that will relieve the rest of the company from expending the necessary finance to keep that subsidiary in existence. Conceivably, it will also make that subsidiary a more profitable enterprise than it would otherwise be.
I suspect that of the three different questions that my hon Friend asked himself about the corporate plan, that relating to employment took pride of place in his thoughts. If so, employment will be guaranteed by the success of an enterprise regardless of who owns it. Indeed, it might be argued that it is more likely to be successful if it is owned not by British Leyland, which is in such a financially parlous state, but by some other organisation apparently so rich as to want to buy it and presumably wanting to buy it because it has the investment to put in to make sure that it is increasingly profitable.
To my mind what I have touched on are the three points in this group of amendments that need to be discussed.
Will my hon. Friend tell us about the prospects of British Leyland being returned to the private sector? Sir Michael Edwardes, in the last paragraph of the letter that he sent to the Secretary of State for Industry, said:
The Board sees collaboration with other manufacturers as an important part of its strategy for recovery and for reducing and eventually removing dependence on Government support.
That is a fairly opaque statement. Sir Michael Edwardes gives no suggestion of the time when that might happen, nor where that collaboration is to be sought. My hon Friend will appreciate that, while we support him tonight and hope that BL's corporate plan will bring the

success to which he referred, we also hope that it will bring a success that in turn will mean British Leyland being returned to the private sector.
Have the Government any thoughts on this matter? For how long are they prepared to bolster British Leyland with taxpayer's money? What are they doing to further the collaboration referred to by Sir Michael Edwardes in the last paragraph of his letter? The House will welcome any thoughts that the Minister might feel able to share with us tonight.

Mr. Tom McNally: I shall not follow the trend of the remarks of the hon. Member for Newbury (Mr. McNair-Wilson). However, as he followed the hon. Member for Knutsford (Mr. Bruce-Gardyne) in his usual attack on public enterprise and investment, I should point out that many of my constituents, who work for organisations such as Fairey, Ferranti, ICL and British Aerospace, do not share the hon. Gentleman's assessment of the wisdom of private enterprise because they have had the benefit of shrewd judgment by Governments— admittedly Labour Governments—in the past. They also recall that the source of many of our problems today is the lamentable investment record of British industry over the past 30 years.
This is an interesting Bill. It started as a simple little measure trying to do good. It has ended up with a large amount of money being given to, and a central debate being held on the future of, British Leyland. Those who have followed its passage and taken part in the various stages have had some interesting moments. The Secretary of State for Industry lost yet another chairman of the NEB along the way. Indeed, he lost a whole ministerial team. It was a kind of mutiny on the "Bounty" in reverse: they left Bligh on board and took to the boats. Finally, we had the announcement of the money for British Leyland. Some of us knew all along that it would be coming.
The purpose of the Bill—if it had a purpose—was a slow educative process for Government Back Benchers of the inevitability of this money for BL. As we saw when the Secretary of State came to anguish before us on 26 January, it had finally dawned on him that not giving money to BL would be infinitely more costly to the country than giving money to BL. It has taken two years for that expensive piece of political education to get home. Yet we still hear speeches decrying intervention and any role for the State in industry.
At the heart of the failure of the Government's industrial strategy is the fact that they have no heart in any policy. They are for ever trying to excuse and appease the hard men on their Back Benches. They have no convictions in which to have courage. As a result, we have this waffly industrial strategy. Conservative Members use the word "strategy" with embarrassment. As a result, there is often a lack of confidence and direction in industry.
I must again express my regret at the way that the Government have dealt with the National Enterprise Board. Before the general election they boxed themselves in in a dogmatic way. They then had to pay this ideological danegeld of taking away many of the board's powers. It would have been better by far to have had a cross-party view on developing the NEB as a useful tool for public intervention. For example, it would have been much easier for the Government to handle the ICL problem if they had not precipitately got rid of their shares in ICL. The


Government dealt with the disposal of their other assets with little or no consultation with the work force because of their ideological commitment to the prejudices of their own Back Benchers rather than to any long-term view or strategy for British industry.
I have already referred to the Opposition's welcome for the commitment to British Leyland. Therefore, I shall not delay the House on that aspect. But I should like to refer to Japanese investment. I understand why some hon. Members say that we must be careful to examine each case in detail. But there is a strong argument for saying that if we are to have a healthy relationship with Japan, part of that relationship should be substantial inward investment to Britain by the Japanese.
Over the years we have often heard British industrialists say "We must invest overseas because other countries will no longer tolerate our simply exporting to them without putting something into their economies by way of industrial investment." Time and again one hears that said by British industrialists as an excuse for investing overseas.
Equally, we should tell the Japanese, who have a £1 billion surplus in industrial trade with us, that that situation cannot be tolerated indefinitely. One way of getting that balance right would be to open up their markets and to show a willingness for inward investment by Japanese industrialists. Although I am cautious and want to see the facts of the Datsun deal, I believe that Japanese investment in Britain should be welcomed and encouraged.
I should like to take up one of the points that were raised by the Minister. He trotted out the old Tory cry of "Where will all the money come from?" I thought it was a tragedy that last Sunday, although she had already received advance notice of the TUC's economic statement, the Prime Minister chose the venue of a television interview to respond in a totally sterile and negative way to an offer by the trade union movement to enter into a genuine dialogue with industry to see how we can get out of our economic and industrial difficulties. On Sunday, she committed billions of pounds, not to industrial investment as the TUC asked, but to unemployment. Perhaps in his reply the Minister will say where the money will come from for the extra billions of pounds in dole payments for the extra million people that the Prime Minister will put on the dole because of her sterile and negative response to the TUC initiative. That is the question that most people are asking.
Even during the passage of the Bill, public opinion and opinion on the Government Benches is slowly turning. People are saying that we cannot leave matters to the forces of the market and to private enterprise. There is a large role to be played by the Government. The resources from the North Sea that have been wasted in keeping men and women idle can be better used in the rejuvenation of British industry. Even at this late stage, I ask Ministers at the Department of Industry to tell the Prime Minister that she was wrong last Sunday, and that she should take up the TUC challenge and try to put British industry back to work again.

Mr. Ian Lloyd: Debates on British Leyland seem to have a compulsive and magnetic quality. One comes into the Chamber, perhaps not intending to take part, and becomes so fascinated by the argument that one feels compelled to intervene, as I am now doing.
I found the speech of the hon. Member for Stockport, South (Mr. McNally) interesting, and I agree with his comments on Japanese inward investment. I am one of the few Members who have visited the Nissan-Datsun plant in Tokyo. I asked whether it was ahead of Detroit, and I was told that its technology was undoubtedly the best in the world. I was told that the best way to import technology was to let those who are the masters show others how to carry it out. In some ways that judgment is shaming.
The remarks of the hon. Member for Stockport, South about public and private sector philosophies reminded me of an interesting comment that was made in this context by none other than a professor at Moscow State university, Professor Popov, who wrote an article for The Times which was in astonishing contrast with an article that appeared underneath by the famous Professor Galbraith, criticising Conservative philosophy on monetarism. Professor Popov pointed out that in the Soviet Union—by definition 100 per cent. public sector—there is no other way. So involved and so inefficient had its industrial resource allocation become that it was devoted to a general extension of what was known as the Shchenikov experiment, in which the managers of plants in the Soviet Union were being compelled to cause redundancy and put people on the dole. The managers would then receive a reward for doing so. That is the sort of thing that we must remember when we are trading prejudices. We all believe that what we say is the naked truth and that what our opponents say is naked prejudice. We all know that the truth lies somewhere in the middle.
I presume that other hon. Members have referred to this debate as a British Leyland borrowing requirement debate. I am sorry that I was not able to attend the proceedings earlier. I wish to make a number of comments. First, again and again I am impressed by the sheer scale of the finance that the House is called upon to provide in cases such as British Leyland, British Steel and others. It is arguable that this is not a debate about low technology, because we know that Rolls-Royce is involved. It is possibly a debate about low and high productivity. The common factor seems to be commercially ineffective technology, and that is a description that we should take more seriously. But to revert to the question of scale, we are constantly being asked to approve sums of £1 billion and upwards. It is almost beyond the wit of mortal man to understand what £1 billion means.
I have been heavily involved in an inquiry in another area, and I know that it takes about £1 billion to build a one megawatt nuclear power station. We are taking out of the resources of this country the equivalent resources that would in another context build a one megawatt nuclear power station that would possibly supply one-fiftieth of the nation's electricity requirements for 50 years. That is what is going into BL. When we talk about £1 billion, it is that scale of resources that we are examining time and again.
I very much regret that because of the timing of the dissolution of Parliament in 1979 the reports of the then Select Committee on Science and Technology on innovation were not made available or brought before the House in the way that I would have wished. The Committee looked particularly at the small engine technology of British Leyland. The evidence has been made public, but the conclusions were not drawn. The evidence was significant. We were disturbed by what we


managed to learn from those who gave evidence about the general level of technology that had been applied in the manufacture of the Mini Metro.
Although we all wish that car success, and hope that it will have continuing success, the conclusion that I drew from the evidence of Sir Michael Edwardes, Sir Terence Beckett, who was then chairman of Ford, Volkswagen, Mercedes, Peugeot and the other principal competitors of British Leyland was that, although the Metro may deserve to have an important success over the next two or three years, because of lack of capital investment and available funds Leyland could not introduce a new technology engine—it would have cost £250 million. Therefore, the stretch in this engine, by definition, must be limited. The real test of the Mini Metro will come when new technology engines that are being installed in vehicles produced by its principal competitors become available on the market in 1983, 1985, 1987 and so on. Unless British Leyland asks for another £500 million, or £1,000 million—inflation will bring the figure to that level—I have serious reservations about whether it will be able to fulfill its expectations and promises.
I turn now to the argument about the roll-on effects on employment. That is a serious but seriously exaggerated argument. It is often said that about 1 million employees depend indirectly on British Leyland—130,000 directly, and the other 870,000 indirectly. In a spectacular economic sense that may be true, but if we look at the totality of the suppliers of British Leyland we shall always find what the statisticians call a lognormal distribution. There will be those firms that supply even 100 per cent. of their output to British Leyland. They will be a small number at one end of the curve, and they should be described as subsidiaries of British Leyland. The employment effect on such organisations, were British Leyland to suffer serious disruption, would be grave, and should be so regarded.
But as we go across the curve from that end to the other, we come to important organisations which supply 50 per cent. of their output to British Leyland and where the impact would be severe but not necessarily disastrous. We then move across further to those organisations which perhaps supply only 10 per cent. of their output to British Leyland, where the impact would be something that they could take in their stride—and which enterprising managements ought to be able to take in their stride.
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There would inevitably be a serious fundamental process of readjustment in the economies of all those organisations which supply a considerable proportion of their output to British Leyland, but I do not accept for one moment that the argument can be sustained that because British Leyland suffered a major disruption of whatever kind, of whatever cause, that would immediately lead to 1 million people being unemployed, with all the financial consequences that we have been led to believe would follow.
But there are other important aspects of this question to be considered. We are constantly told that the unemployment would be very severe and serious. To the extent that this is true and would be visible, it is undoubtedly an important argument. But we hear much less about the effect on the jobs lost in what one might call

the subsidising sector of British industry—that proportion of British industry which has to carry the fiscal and financial strain of raising the money that is required. Jobs are undoubtedly lost there and employment is reduced, but we do not see it, or we do not hear as much about it. It is much less perceptible. It does not occur in one single lump, but that it occurs generally and that it may well be generally significant can be judged from the figures which are common knowledge and, if I may say so, are our common regret.
But there is perhaps an even more important and significant effect which is less generally discussed and is, in my humble judgment, even more important. We do not hear about the effects on employment in the industries as yet unborn in this country. I have some figures from the United States. Within a period of about five years, of 9 million jobs created in the United States, 70,000 were created by the top 500 in the Fortune league—the biggest companies in America—and the rest were created by new small firms.
I do not believe that our position is in any way fundamentally different from that. It is the capacity of the United Kingdom to create, to foster and to sustain new small firms—the new growth points of the new age, whether of information technology, biotechnology or any of the other industries that we see emerging—that is much less discussed. I believe this to be the most significant cost that the country has to pay when it is asked to divert resources on this scale—whether to British Leyland, British Steel or Rolls-Royce is neither here nor there.
I had an interesting example of this the day before yesterday when I had the privilege of visiting the Rutherford laboratory and saw an absolutely outstanding and brilliant new British invention—something known as a cellular logic image processor, or clip computer. This is now being developed, and one only has so far been produced. It was my judgment that this was an outstanding achievement, and that we ought to be developing it in this country. It could well form the basis of an industry almost as large as the present computer industry, since it is a new generation, a new type, a new philosophy, of computer.
I asked "What stands in the way of its development?" I was told that what stood in the way was something between £500,000 and £1 million. I immediately said "That is one-tenth of 1 per cent. of the sum that we shall be voting for British Leyland." But the industry which could grow from it could be of the utmost significance. I hope that there may yet be ways found for it to develop. It would be an outstandingly significant British achievement, where the standard of the technology would not be easily followed and would be unlikely to be repeated.

Mr. Orme: We have the NEB.

Mr. Lloyd: The NEB has, of course, some knowledge of this and some connection with it, but that by itself is not enough. The incentive to create and sustain new projects of this kind, bringing to birth new technology, of which this country is still a great progenitor, is insufficient.
Some hon. Members have made complaints about exchange rates. Many hon. Members who have served in this House for some years will recall the agony that we went through when the exchange value of the pound was falling. I can remember well the arguments produced on each side of the House—almost independant of where we


were sitting—regretting the mismanagement of national economic policy that was leading to a deterioration of our currency. I do not think that those arguments have necessarily become invalid, but the point I want to make is a much more relevant and specific one.
If we examine the relationship between the most successful industries in Japan, West Germany, the United States, and other countries such as Switzerland—those countries which in the 1960s and 1970s managed to sustain the value of their currencies far above the general downward drift that was taking place all around them—what do we discover? Their most outstandingly successful industries were shipbuilding in Japan, microelectronics and aircraft in the United States, and diesel engines in Switzerland. Despite the high value of the currencies in the countries concerned, those industries continued to prosper. Why? The answer is simple. They were industries of steadily and continuously rising productivity. It was because their productivity was rising far faster than any disadvantage that was imposed by the appreciation of their currencies that those industries flourished, and the countries in which they flourished also flourished with them.
That is the answer to the argument that for the United Kingdom to recover its position we must, as it were, destroy our own credit in the eyes of the world and deliberately create a situation in which the value of our currency falls. I do not for one moment believe that that is the answer, because all the evidence is against it. Although there are obvious and perceptible difficulties—and one should never minimise them—for those who are suffering from the sudden increase in the value of our currency, to say that as a matter of national policy we must now stand on our heads and put the policy into reverse is wholly mistaken.
I have mentioned already the size of the sums with which we are dealing. I know that my right hon. Friend argues with great conviction and great justification that nothing would be worse than for politicians to breathe down the necks of those who have the task of managing major national industries, whether of the Rolls-Royce and British Leyland variety or nationalised industries. This House has always held back from imposing on itself the obligation of such detailed supervision. That I totally accept. The day-to-day management must be a matter for them, up to a very considerable point of decision making and investment. But can we go as far as to say that we must write a blank cheque—or that this House must write a blank cheque—for £1,500 million or £2,000 million, and never know, let alone ask, in relation to a company such as British Leyland, what proportion of that sum is likely to be paid out in wages, or in higher wages, what proportion is likely to go in investment, and so on? We need not ask for detail. We might be told that, say, £100 million was going into assembly technology, £50 million into some other technology, and so on. That, at least, we ought to know.
We ought also to know what proportion of the money is going to research and development. Research and development today—not least in the automobile industry—is absolutely fundamental to the success of industry. It is largely because British Leyland neglected its research and development over a long period of years that it found itself in some of the difficulties that it now faces.
There are a few questions of that kind that this House is entitled to ask and to which it might expect to be given replies on a rather more routine basis when either Conservative or Labour Governments ask us—as they have, and will again—to endorse these very large sums for what in a sense each party regards as inevitable and unavoidable national investment.
First the bad news, now the good news. I wholly endorse the miscellaneous provisions, which have not so far been mentioned, in clause 6(1) under which the Secretary of State is asked to encourage young persons and others to take up careers in industry and to pursue appropriate educational courses. I believe that a considerably larger expenditure of national resources in pursuit of that objective is wholly justified.
Sir Charles Carter recently produced a report on the application of microelectronics in British industry that contained interesting conclusions. A study was conducted into 90 firms to see how they were reacting to the challenge. A number at the top, which understood the subject, had made judgments and were doing something effective. A second category had looked at the problem but was doing nothing. Much more serious was the third category, which had looked at the problem, had felt that there was nothing it could do, and decided to cut agents and import products from overseas. That is a reflection of lack of the appropriate educational base in microelectronics and high technology among a considerable number of people in this country.
I support the objective stated in the Bill. I support equally the diversion of significantly larger national resources in the achievement of that objective.

Mr. Bob Cryer: I am pleased that the Government have decided not to put BL on the waste heap, which has been the fate of so many jobs in the sad decline of British manufacturing industry over the past 18 months. The announcement recently of support for British Leyland to the extent of £950 million was welcomed by the Opposition, although it was received with rather mixed feelings, I imagine, by Conservative Members. I hope that the money allocated for the NEB in this Bill, together with the money that is going to British Leyland, will be used to help to regenerate British manufacturing industry and the skills and abilities that we possess. When the oil runs out and when the coal is diminished, the skill and ability of our people are the real resource of the nation. With the present decline in British manufacturing industry, those skills and abilities are not being properly encouraged and developed.
I wish to refer to industrial relations at British Leyland. Large sums of money are involved. We do not want a repetition of the interrupted production of the Mini Metro, which has been an extremely successful venture. The NEB has the task of promoting good industrial relations. The fact that British Leyland is to receive significant sums of money does not mean that management can afford to point a pistol at the head of the trade unions or seek to diminish the role and importance of the trade unions in the motor car industry. The British Leyland eight, who have been subjected to what appears to be a process of victimisation, feel strongly that the circumstances that have been brought about result from a determination by management to crush the power of trade unions in the motor industry.
I have spoken to one of the eight. They were amazed that 1,500 workers came out of the BL Mini Metro line


because of their bitterness over the change in tempo and technique adopted by the management at British Leyland. Sir Michael Edwardes is not a guru. The creation of cars is carried out by all the factors of production involved and, most importantly, by the thousands of people who work at British Leyland. Working in the car industry is an onerous job. Time, effort and ability must be devoted to promoting good industrial relations. Such relations are not brought about by a continuing policy of confrontation against those in the work force who devote their time and effort to promoting the trade union view.
The support for British Leyland through the NEB means that many thousands of small companies are also supported. In the present state of the economy, it is often crucial that a small firm should have continuity of production even if its BL output represents perhaps only 25, 30 or 40 per cent. of its total manufacturing range. That percentage today assumes an ever more important proportion of manufacturing. The support is, therefore, a lifeline for small firms.
I should like to examine the position of Datsun in relation to British Leyland. I have already said that skills should be rebuilt and regenerated. It is important that we develop our own indigenous manufacturing industry. That is what the NEB was set up to promote. I hope that this is the purpose for which the money we are discussing will be used. The statement made by the Minister referred to local sourcing of components. The Minister did not make clear whether this meant that they would be of United Kingdom manufacture or EEC-wide manufacture. If the latter, we will have a rival concern to British Leyland, where a large chunk of this money is destined to go, which will source on the EEC and thereby diminish our manufacturing facility even further.
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It will hit British Leyland. It cannot be argued that competition will be increased. We find ourselves in the international subsidy league. It is important for the Opposition to examine this matter. The same procedure was adopted by the Labour Government. Conditions were attached to Japanese investment here. I hope that this Government will attach stringent conditions. What happened in the YKK case was that YKK, a Japanese zip manufacturer, opened a production facility in this country. There was no agreement about the sourcing of components that was hard and fast. As a result, the company assembled largely Japanese-made components which eroded the number of jobs in the indigenous manufacturer, Lightning, in this country to the point of a factory closure. That is absurd. I suspect that this potential exists in the Datsun investment.
What sort of money will be involved in the Datsun investment? The company is not coming here for any other reason than that the Government and the taxpayer will offer 22 per cent. regional development grant if it goes to a special development area. That is automatic. The company receives that amount for every £100 of investment in the project. There then arises the discretionary grant under regional selective assistance. This is given if the project is concerned with the creation or retention of jobs or if the project will take on another

dimension if regional selective assistance is given. How much will be involved? Will it amount to 50 per cent. of the total investment? Will it be less? Will it be more?
If Datsun is established here and starts making profits, it will be able to offset against corporation tax every penny that it invests in plant and machinery in this country. At the end of a period in which suitable profits are made to offset the investment in plant and machinery, the British taxpayer, by direct grant or by failure to receive corporation tax, will have paid totally for the investment. The investment, however, will not be under their control. It will be under the control of a multinational, with its headquarters several thousand miles away, where decisions are not under the control of the work force, the people of this nation, or the Government.
That is less than satisfactory, particularly at a time when the product is having to compete with that of a Stateowned company which is rightly being supported by a considerable sum allotted by Parliament.
Everyone welcomes the creation of jos, but we must realise that jobs are better created by using our own facilities and developing our own projects instead of relying on the multinationals. There have been significant cutbacks in jobs by multinationals, particularly in development areas. We do not have legislation to prevent that from happening. France is by no means a Left-wing country, but there the Minister responsible for employment has to give his approval when jobs are cut for economic reasons. Here a firm can close and, as long as it goes through the redundancy procedure, that is an end of the matter. Handing over such a large degree of control and manufacturing responsibility to multinational companies wil not in the long term help to secure the retention and development of our manufacturing industry, particularly if the components come mainly from the EEC or Japan, with the important design and development skills being located outside the country. Without a Government committed to much greater investment in our indigenous industries and prepared to stand up to EEC restrictions, we shall find ourselves in the international subsidy race, treating the advent of a multinational, with all its dubious connotations, as a famous victory, when in fact the jobs at the end of the day will be paid for by the British taxpayer. The British taxpayer could instead own the factory, create the jobs, and undertake and control the whole enterprise. The taxpayer could control decision making through the Government of the day.

Mr. Bruce-Gardyne: I am in a considerable measure of agreement with the hon. Gentleman's criticism of the way in which taxpayer subsidies are given to such investment. However, surely that follows ineluctably from the whole series of Industry Acts passed by successive Governments over the past 10 years.

Mr. Cryer: I shall not go down that road, as if I were to do so I would probably be out of order.
Certainly the Industry Act 1975, which was supposed to attach strong strings to the money that we gave to the private sector, was significantly watered down and we lost the degree of control which we should have had and which the next Labour Government will certainly institute. They will institute, for example, planning agreements. What about a planning agreement with Datsun? What about an allocation of market share, for example, or shall we see


British Leyland to which the taxpayer has contributed massively having to face that competition and possibly withering away in some areas even further?
I am in favour of public expenditure being devoted to the creation of jobs. However, we should rely on our own resources to develop design and high technology. We should not rely simply on the multinationals. The Conservative Government do not quibble about public expenditure to create jobs when they talk about spending £5 billion on Trident. Then they emphasise that such expenditure results in job creation and retention. I want to see us carry out a Labour Party policy and switch money away from defence towards peaceful purposes. The principle is the same. Public expenditure creates jobs. The money is not available from the private sector, which has let us down badly, even under a Conservative Government.
Public investment also creates jobs in the private sector. As I said earlier, putting money into British Leyland helps to create and maintain many thousands of jobs in the private sector. I use the illustration of small companies, but medium and large firms are also involved. For example, the textile industry in Lancashire and Yorkshire provides seat covers and head-linings for cars.
The Government should be determined to use their strength in the EEC. Datsun wants to get into the United Kingdom in order to get free movement for its goods within the EEC. Its market penetration in France, for example, is very small. We should be prepared to use our market, which is still an important and wealthy one, as a bargaining counter. If the multinationals want to get into our market, we can allow them in under our conditions, which should be stringent. If we choose, we can use our position, but we cannot do so as long as we adhere to the Treaty of Rome, which robs us of the opportunity to differentiate our position in order to protect our manufacturing industry from imports or investment by multinationals. Multinationals are not here to give an advantage to British manufacturing industry. They may well erode it. If we are to retain British manufacturing industry and to have the necessary investment—for example, investment in high technology—we shall have to use some form of quota or import control while our manufacturing industry catches up.
The Bill is merely a sticking plaster on the public sector, which is being drained by the Government. Sticking plasters are all right, but what we need is a Government determined to see a public sector that works and a Government determined not to use unemployment as an economic tool. We need a Government who see the ending of unemployment as an important priority—and that must be the next Labour Government.

Mr. Dixon: I am glad that my hon. Friend the Member for Keighley (Mr. Cryer) has extended the debate beyond British Leyland, although I welcome the finance that is being made available to the company.
Amendment No. 5 reduces the amount of money available to the NEB, which will hit the North and other such areas. The introduction of the National Enterprise Board was a lifeline for us. The regional enterprise boards were also greatly welcomed. As I said in an intervention, in the North we do not have a development agency, a Minister for the North, a Select Committee or a Grand Committee. However, we have the highest percentage of unemployment of any area in England, Scotland or Wales

and the second lowest number of job vacancies. That means that for every vacancy in the North there are 50 unemployed people. In some areas, that figure could be multiplied by 10.
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My hon. Friend the Member for Stockport, South (Mr. McNally) said that we should be talking about unemployment. The Bill concerns unemployment, and attempts to alleviate it. It cannot be taken in isolation from the Government's other policies. It is no good having an employment watershed in manufacturing industry when, at the same time, there is a watershed in local government. However, many areas are in that position. It is ridiculous to tell a person that he cannot draw his wages from the local town hall, but that he can go to the local employment exchange and draw public money for doing nothing. That is the result of this Government's policies.
I asked the Prime Minister what advice she had for some of my constituents who had taken her previous advice and had moved to find employment. As a result of the Government's economic policy hundreds of males, their families and friends found themselves out of work. I wrote to the Prime Minister but she said that they would have to move on until they found employment. What way is that to run a country? People talk about vandalism and unrest. The Government are turning our people into industrial nomads, and are breaking up communities. The Prime Minister should tell the Secretary of State for the Environment to provide a certain amount of money in the housing investment programme for caravans so that workers can tow them round the country looking for work. That is the only advice that the Prime Minister will give.
I received a letter from one of my constituents. It is a pity that some of those Conservative Members who giggle like adolescent schoolgirls when we talk about unemployment are not here to listen. The letter states:
Please help me! Through no fault of my own, I have been out of work for over a year now. I assure you sir I have tried, I have looked for work.
Within the last year sir, I have had over 52 formal interviews within South Tyneside and out—including places as far as Dover, Hull and London.
Some of these interviews I've even hiked it, even whilst I write this letter sir, I promise you I am seeking fitfull employment. My point sir, a feeling of mistrust. At the present time I am sick up to my ears with the Social Security and its treatment.
Every 3 weeks since last March, I had to report to them like a schoolboy with his homework, giving them a progress report on my job seeking.
Every 3 weeks I go to the Arndale House,"—
that is the local exchange—
I feel despair, I feel degraded, no longer a member of the human race. Whilst I sit there in reception, waiting for my name to be called out I feel so full of grief and let down, I feel like they've made me a social misfit, they think me a failure or worse sir—a malingerer.
That constituent has been out of work for a year. I felt that it was important to get that letter on the record.
I welcome those parts of the Bill that deal with British Leyland and provide finance. However, the Bill does not offer anything to areas such as the North. It is a retrograde measure because it cuts the amount of money available to the NEB. The NEB could help the North. I saw the Prime Minister's interview with Brian Walden on "Weekend World" and I heard her say that an upturn would come and that when the recession was over everything would be fine.
During the 1950s and 1960s we had the longest period of sustained growth, yet 80 per cent. of the new jobs


created in manufacturing industry were located in the South-East. Unless there is a strong regional policy, areas such as the North—areas that have been turned into industrial deserts as a result of the Government's policies—will have no future.

Mr. John Cunningham: I shall be brief. One thing has become clear from the debate and from the Government's statement on British Leyland, namely, that despite the Secretary of State's greatly professed ideas about intervention, not only is it back on the Government's agenda in terms of their industrial policy, but it stands in pride of place. It is ironic that the Minister should find himself in this position. We know that he is robust enough to look after himself, both at the Dispatch Box and elsewhere, but—given his well-known record on State intervention—even he will have to be a little cheeky to continue to support what is happening.
We welcome the Minister's conversion. We look forward to more of his robust parliamentary activities in support of State intervention, not only for British Leyland but for other industries such as Rolls-Royce, the steel industry, British Shipbuilders and the NEB. It is also ironic that the Secretary of State—I am pleased to see him in the Chamber this evening—should have said so much about industrial strategy, planning and attitudes to intervention in the economy. I do not use his words, but to say that some of his words are not worth the paper that they are written on would sum up some of his comments on these matters. He has already involved himself in more approaches to planning and major planning agreements than the previous Labour Government did in their whole term of office.
Of course, the right hon. Gentleman does not involve the trade union movement in the consultations that lead to things such as the British Leyland corporate plan or the MacGregor proposals for British Steel. However, these are agreements between the industries and the Secretary of State—or the Department of Industry—to plan the future of those industries. We welcome that, but we wish that the right hon. Gentleman had not taken so long to be converted to the general idea, which is a good one.
The Opposition urge the right hon. Gentleman very much to involve the trade unions in the sort of planning to which I have referred. The trouble seems to be, as the hon. Member for Bromsgrove and Redditch (Mr. Miller) said, that none of this is co-ordinated. Perhaps that will emerge over the next few months too, and we shall see the conversion of the Secretary of State.
In November 1979 the Prime Minister said:
It is not for politicians to try to take over the management of public sector industries."—[Official Report, 22 November 1979; Vol. 974, c. 559.]
The right hon. Gentleman has done that with Rolls-Royce and he is now doing it with British Leyland in the sense that he is removing the buffer of the National Enterprise Board from the relationship between the company and the Government.
We have heard a great deal, not only about intervention, but the scale of intervention. We heard that from the hon. Members for Havant and Waterloo (Mr. Lloyd) and for Knutsford (Mr. Bruce-Gardyne) and from others. They said that intervention on such a scale, involving such vast sums, took a lot of justifying. Words such as "unprecedented" have been used. That is not really

so in terms of this country, although these are large sums compared with the cost of building a power station, a North Sea oil production platform or the development of Concorde. These are not outrageously large sums.
In an interesting paper to the Institute of Fiscal Studies, Sir Arthur Knight said:
The success of our industrial competitors' more coherent policies ought to make us re-examine our attitudes. An independent study commissioned by the NEB a year or so ago concluded that the Governments in the twelve main developed countries accept that they have a role in coping with the failures and inadequacies of the market and found considerable evidence that those governments most associated with the ethos of the private market economy—Japan, Germany and the USA—intervene on a larger scale and in more varied and sophisticated ways than do governments more commonly thought to be interventionist.
That is the reality of industrial investment and industrial policy in the Western industrial world. The Secretary of State and the Minister of State may pretend to fly in the face of that to win over the support of some of their more market forces orientated colleagues, but they are coming to accept reality.
We certainly want to see more of this intervention. The Governor of the Bank of England recently made a speech in which he said that he thought we should see the end of the recession later this year. If that is so—and I shall be interested to hear whether the Secretary of State agrees—is not this the time to increase investment in both the public and the private sector? If the recession is about to bottom out, should not we be ensuring now that when that upturn comes, however small it may be, our industries—or what is left of them—are well equipped, have the resources and have had the capital investment to meet whatever market opportunity arises? We should very much like to hear what the Minister has to say about that.
Unfortunately, the optimism of the Governor of the Bank of England is not altogether shared by the CBI, which predicts sharp falls in manufacturing employment throughout this year and talks of very large figures of further unemployment. A rough estimate of the present cost to the taxpayer of unemployment and associated supplementary benefit must be about £¾ billion per quarter, or approaching £3 billion per year. That is the cost to the taxpayer of keeping all those people on the dole and out of work. I shall not be diverted into an argument about whether it is all the fault of the Government that so many people are on the dole and out of work. My point is that it is no soft option for the taxpayer. It is quite the reverse. It is a waste not only of human resources in talent and skills, as my hon. Friend the Member for Keighley (Mr. Cryer) pointed out, but a waste of money which could be put to far greater purpose in terms of investment in the economy.
As my right hon. Friend the Member for Salford, West (Mr. Orme) said, we of course welcome the commitment to British Leyland. It deserves a period of sustained support, with less intervention and perhaps, even in terms of debates and discussions in this House, a period of peace and quiet in which it can be left to get on with the job. I agree with the hon. Member for Bromsgrove and Redditch (Mr. Miller) that without a medium-term commitment to the plans of the company, no one would have been settled. Management would not have been settled, the work force would not have been settled, the dealer network would not have been in a stable situation, and there would have been little hope of success. We therefore welcome the Government's commitment in that regard.
The hon. Member for Knutsford (Mr. Bruce-Gardyne) suggested that British Leyland could have been broken up and perhaps disposed of without any real damage. Nothing could be further from the truth. How could the company sustain a large dealer network without a significant range of cars to offer? The reality is that it would not be able to do so. That is one of the biggest single arguments for keeping the company in its present shape and size. If BL is to win back a share of the market, it can do so only through an expanding dealer network, and dealers will not come to the company if it cannot offer them an adequate range of vehicles. I hope that the Government will bear that very much in mind when they are tempted to respond to arguments put to them by Tory Back Benchers.
I turn to the question of Government strategy in terms of industrial policy and investment. The Financial Times recently summed it up in the following way:
In his public pronouncements, Sir Keith seems to have lurched from a policy of laying down rigid targets for problem industries, which proved unachievable, to a policy of installing able management and backing it to the hilt. The new approach is more hopeful than the old, but there is still a need for the Government to set out its strategic objectives and performance criteria when large sums of public money are to be committed.
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We would very much welcome a great deal of that. The Government cannot go on intervening on a one-off basis or an ad hoc or unco-ordinated way. We should have an industrial strategy like most of our competitor nations such as France, Germany and Japan. There is nothing particularly Socialist about this. That is one of the ironies about the way in which the Secretary of State refutes these arguments. There is nothing particularly Socialist about those countries or their Governments, yet they see the imperative need for such an approach to industrial development in the modern world.
We therefore urge the Secretary of State to think again about such a need for Britain. It would be welcomed not only by Labour Members but by the TUC and probably by many people in the private sector, including the CBI. We think that the NEB should play a significant—not a dominant—and growing role in such a strategy.

Mr. Tebbit: With the leave of the House, I should like to reply to some of the points that have been made. I do not think that I can reply to them all, otherwise the House would become anxious and tetchy towards the second hour of my speech. I thank the hon. Member for Whitehaven (Dr. Cunningham) for the way in which he spoke. At one stage I had the feeling that he was welcoming me as a sinner come to repentance. I assure him that I am entirely unrepentant and that I have a lot of sin left in me yet. He need have no doubts whatever about that.

Dr. John Cunningham: I hesitate to don the role of cleric, but in that case we look forward to many more confessions.

Mr. Tebbit: They are always made in private. I am sorry that the hon. Gentleman tried to play down the size of the sums of money about which we are talking—the investment in British Leyland and, potentially, in RollsRoyce. He compared it with investment in Concorde and nuclear power stations. I remind him that investment in Concorde was made over a period of 20 years or so and that nuclear power stations do not seem to use up £1 billion in two years—at least, I hope not.
We must accept that these are extraordinarily large sums of money. We must ensure that, when a decision on a sum of money of this sort is taken, it is taken soberly in the knowledge of the effects that it will have on the remainder of the economy, especially when that sum of money is taken from the taxpayers or lenders generally.
I turn to some of the points made by the right hon. Member for Salford, West (Mr. Orme). He asked for a statement on ICL. At present I do not think there is a need to go further than to say that the Government are aware of the situation at ICL, following the company's annual general meeting yesterday. It is a company with which my Department has frequent contact in the normal day-to-day course of discussing its research and development programmes. Therefore, there is no lack of contact between us. I do not think that there is any call for a statement, at any rate at present.
The right hon. Gentleman also urged me to say something about the position of Talbot, in Linwood. It is also difficult to go very far at present in that respect—not least because a number of hon. Members will be meeting my right hon. Friends the Secretary of State for Industry and the Secretary of State for Scotland tomorrow in order to discuss these matters and the response which the Government should make towards the company. Certainly the company is well aware of the possibilities of investment aid that are open to it. No doubt those matters will be discussed more thoroughly tomorrow with my right hon. Friends.
It would probably be best if I were to deal generally as far as I can with a number of the points that have been made about Nissan. There was a great deal of concern about the effect of Nissan and the restrictions that might be placed upon it in the event that it decided to come to the United Kingdom. One thing which is helpful is that we are discussing these matters against the background that the SMMT and JAMA were able to announce today that they had reached agreement to the effect that the Japanese industry would resort to what they called even more prudent marketing of motor cars in the United Kingdom in 1981 than it did in 1980. That is helpful in indicating a knowledge on the part of the Japanese industry of the fears which they have created.
In regard to Nissan, it is important to remember that it is engaged on a feasibility study and that if all goes well that feasibility study could lead to production beginning at the end of 1984 and leading up to 200,000 cars a year in 1986.

Dr. John Cunningham: I do not want to delay the House except to ask this about the feasibility study. We were told in the Minister's statement that the feasibility study would take place. We also learnt that the Northern region of England and South Wales were apparently to be considered. Do the Government think it is even-handed, therefore, to send the Secretary of State for Wales rather than the Secretary of State for Industry to Japan to talk about these matters? It has left the impression in the Northern region of England that the decision has already been made.

Mr. Tebbit: I can assure the hon. Gentleman that the decision on siting has not been made and will not be made so much by Government as by the company itself. The fact that my right hon. Friend the Secretary of State for Wales is intending to visit Japan should not be regarded as having


any direct relationship with the Nissan project. Like a number of Ministers, from time to time he travels abroad seeking inward investment for the United Kingdom as a whole. Certainly when I travel abroad seeking inward investment the hon. Gentleman should not assume that I am trying to get it all to come to London. I have other parts of the kingdom in mind as well. I am sure that all Ministers take the same view when they are abroad.
If I might continue, the Leyland proposal for a new medium-sized car should be on the market something like two years ahead of the Nissan car. That seems to be a signal to Nissan very clearly indeed in commercial competitive terms that BL will be ahead of it and that it will have to size its motor car and look at its share of the market taking that into account. The share of car production of United Kingdom manufacturers has fallen enormously over the years. Last year it was only 57 per cent. and I am certain that there is room for both Leyland and Nissan in the British market.
A number of hon. Members expressed anxiety on the point of the degree of local content and about whether these cars could be exported to Europe. I am sure that the Treaty of Rome is bedside reading for my hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne), as it is for many of us. He should try to find the section that will allow one nation in the Community to erect import controls against another nation's domestically-produced vehicles. It would be difficult to find such a section. The French tend to buy their own motor cars. That is not because of barriers but because of the way that the French feel about the motor car industry.

Mr. Ron Leighton: Is the Minister aware that the Italians are stopping the import into Italy of Sony television sets made in Wales?

Mr. Tebbit: That is true. I understand that the matter has been taken up with the Commission. The Italian authorities have been told that they might be found to be in breach of the Treaty and that measures might be taken against them. Of course, some countries will try it on. Some hon. Members here think that we should try it on and breach agreements under the Treaty. I do not advocate that.
I am a little anxious about the attitude of a number of hon. Members to inward investment. The hon. Member for Keighley (Mr. Cryer) did not seem keen on it unless the company concerned is willing to hand over management of the investment to the British Government. I do not know whether he wants to chase away Ford, IBM, Vauxhall, Talbot, International Harvester and many other multinationals from Great Britain. He seemed happy to impose conditions on inward investment which would be unacceptable to the inward investors.
He said that the measures amounted only to a bit of sticking plaster. A £1 billion Elastoplast must be the most expensive produced yet. He would do well to consider that it is better to encourage inward investment and to allow British multinational companies to invest prudently overseas. The hon. Gentleman must accept that if we decided to impose such onerous conditions on investment into Britain, not only would we lose inward investment, we would cripple the chances of British multinationals

investing overseas. That would have severe effects on jobs and the general economic development of the United Kingdom.

Mr. Bruce-Gardyne: Some of our anxieties might be alleviated if my hon. Friend could make it clear that, although Nissan-Datsun will be eligible for the appropriate regional development grants because of the way in which the Industry Acts are written, it is not the Government's intention to offer section 7 or section 8 assistance.

Mr. Tebbit: That has not yet arisen. I am extremely disinclined to announce such decisions in the House before the company has decided whether it wishes to come here under any circumstances. It is better to wait and see what the projects and benefits are before we make up our minds how they should be handled.

Mr. Maxton: Several hon. Members asked whether the company would be at least urged to give guarantees that it will use the British component industry and British steel. Will the Government ensure that such guarantees are given?

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Mr. Tebbit: If I were to ask the company for a guarantee, for example, that it would use British steel, it would ask me for a guarantee that the price, quality and delivery of the steel would be as competitive as other steel which was available. It would not be easy to give guarantees of that sort over a long period ahead. It is no good a company coming to this country and then being hemmed in with restrictions which might make it impossible for it to operate competitively. The test will be whether the British component industry and the British steel industry can produce to the standards and requirements of Nissan if it comes here. If they cannot match competition from abroad in supplying that factory in the United Kingdom I can see little hope of their being able to match competition when they try to export those parts in British manufactured cars.

Mr. Cryer: Is the competition subsidised?

Mr. Tebbit: The hon. Gentleman goes on about subsidies but the number of tales that I hear about subsidies in foreign economies leads me to believe that they are subsidising everything all the time. It is a puzzle to decide where the money for the subsidies is coming from. We need to think more carefully about that. There are a number of critics abroad who would say that action ought to be taken against a number of British exports in respect of the amount of British taxpayers' money which has been used to subsidise those productions.

Mr. Cryer: Does the Minister accept that it is reasonable for the British Government to seek whatever assurances they can, taking into account quality, price, delivery, and so on, that the product made by Nissan in this country should contain British-made components to the maximum degree possible?

Mr. Tebbit: The assurance from the Nissan company, which we sought, was that on start-up it would expect to take 60 per cent. and by the time that it was in full production at least 80 per cent. of components from local sources. That means EEC sources. It is important that we do not exclude that possibility. If we did, we should be


opening the way to other European countries taking the view that they would have a case for taking action to prohibit the export of those cars to Europe.
I turn briefly to questions about the Leyland plan. My hon. Friend the Member for Newbury (Mr. McNairWilson) and others were interested in how the Government assessed the plan—whom did we consult, did we use outsiders, and matters of that sort. No, we did not use outsiders, but I can assure my hon. Friend that the Government are not totally bereft of advisers with industrial experience.
For some time the Government have had a policy of introducing people on secondment from industry and allowing civil servants to work in industry to learn more about it. I am satisfied that we have a number of people—probably more than ever before—who are wellqualified to look at those plans, the accounts and the propositions and to give sensible advice on them.
My hon. Friend and others were concerned about the way in which we could accelerate the progress of BL, in whole or in part, to the private sector. It is not, as some Labour Members seem to think, all joy and nothing else for the taxpayer when a publicly owned industry begins to make profits. That industry still demands cash because it can seldom generate enough profits for its cash requirements. That cash, if it is generated from Government sources, has to compete against all other uses. It has to be financed from taxation or by borrowing. That inevitably means higher interest rates, which strike against the interests of industry as a whole. However, I can assure my hon. Friend that we looked very closely at the possibility of disposals. I understand that there is a good prospect of disposals of the order of £70 million from the non-mainstream activities of BL.
I hope that in due time that collaborative venture of which there has been a great deal of talk will result, as Sir Michael Edwardes said in his letter to the Secretary of State, in a much closer relationship in which the majority holding—I would hope the minority holding as well—will eventually be taken out of Government hands. I see no reason why the British Government should be in the motor industry.
In his absence I refer briefly to the remarks by the hon. Member for Truro (Mr. Penhaligon). He gave the measure general support. I do not think that our problems have just been caused by our having oil and by the petro-pound. We have to ask whether it was all paradise before we found our oil. Were the constituents of the Leyland group all go, go, go and top flight successful motor car companies before we struck oil? I do not think that they were. These troubles were coming upon us before that.
We discussed the hon. Gentleman's views on reducing the value of the pound, and I have nothing more to say on that. I should point out, however, that if he feels that the work force has learnt nothing from its experience in the past few years, I believe that it has learnt a lot. I believe that it will remember it as we come out of the depression and move into prosperity.
My hon. Friend the Member for Surrey, North-West (Mr. Grylls) asked about the NEB limits. The hon. Member for Jarrow (Mr. Dixon) referred to a reduction in the limits. My hon. Friend spoke of an increase. I am happy to stand more of less neutrally between them and assure them that they are both wrong. There has been no change in the limit for the NEB. It is still £750 million, and I can assure my hon. Friend—perhaps to the distress

of the hon. Member for Jarrow—that that does not betoken an intention to dash off immediately and spend another £400 million or £500 million through the NEB next week.
As for the way in which the NEB operates and the criteria to which it works, I can add little to the full statement made by my hon. Friend the Under-Secretary of State for Industry on 11 December 1980 in which he set the matter out extremely clearly. He made a very long statement, and I hestitate to go through it again at this time of evening.
I apologise to a number of hon. Gentlemen who spoke in the debate and to whose questions I have not referred. If any feel that I have failed lamentably to cover their points I shall, if they let me know, write to them. I see the hon. Member for Birminghan, Stechford (Mr. Davis) nodding. We shall certainly see if we can do so. I do not think that I should be popular if I went on for too long now.
The right hon. Member for Salford, West must not allow himself to slip into thinking that necessarily we should always subsidise every job that can be shown to cost less than the bill for unemployment pay and for loss of taxes. I ask him and the House to consider just how large a proportion of jobs we in this country could sustain on that basis. It would not be very large. We must ensure that we do not damage other jobs in the process of taxing and borrowing.
Of course, we all hope that this money for Leyland will enable the Leyland workers to secure their jobs, because no one else can do it but them. Equally, we can have no doubt, as we vote on these matters, that the taxing and the borrowing that are involved will strangle some existing jobs and abort others as yet unborn. Their numbers are unknown. As some hon. Members have suggested, they are scattered widely across the country. Therefore, perhaps they have no immediate constituency in the House. We would do well to remember them as we rejoice—I believe that we should all rejoice—that, for a time, the jobs at Leyland are more secure than they have been for some time past.

Amendment agreed to

Amendments made:

No. 6, in page 1, line 12, leave out "£2,251 million" and insert "£750 million".

No. 7, in page 1, line 12, at end insert—
(1A) In section 8 of the Industry Act 1975, subsections (2A) to (2C) (Secretary of State's power by order to reduce the limit mentioned in subsection (2) of section (8) are hereby repealed.".

No. 8, in page 2, line 4, leave out
are substituted the following subsections

and insert
is substituted the following subsection".

No. 9, in page 2, line 6, leave out "£1,500 million" and insert "£4,400 million".

No. 10, in page 2, line 7, after "order", insert
made with the consent of the Treasury".

No. 11, in page 2, line 8, at end insert
to an amount not exceeding £5,250 million.'

No. 12, in page 2, line 9, leave out from beginning to end of line 11.—[Mr. Tebbit.]

Clause 6

POWERS TO PROMOTE CAREERS IN INDUSTRY ETC.

Mr. Douglas: I beg to move amendment No. 14, in page 3, line 2, leave out from beginning to end of line 28 on page 4.
The effects of this amendment would be rather devastating, because it seeks to remove the whole clause. The reason for tabling the amendment was partly probing and partly disappointment in the knowledge that the Government were content to part so vehemently and significantly from the recommendations of the Finniston report.
It is as well to remind ourselves of what Sir Monty and his colleagues recommended in that report. One of the key phrases in the report appears in page 3 where Sir Monty attempts to define rather succinctly the engineering dimension. He said:
the engineering dimension—that is the effectiveness of manufacturing organisations in translating engineering expertise into the production and marketing of competitive products through efficient production processes.
That may seem rather flamboyant, but it goes far beyond education and training. Although there is an attempt in the clause to dress this up, it goes far beyond the remit of the clause.
We level other objections at the Government's proposals arising from the Finniston report. Although the Under-Secretary of State for Industry tried to gloss it over in Committee, the plain fact is that the Finniston report wanted this body to be a statutory body with statutory powers for registration purposes. Opposition Members would not be wise to depart from that analysis.
In the intervening weeks and months since the publication of the Finniston report and the consultations, engineering institutions and the Council of Engineering Institutions have reasserted themselves. The Government have in many ways partly caved in to the views emanating from those bodies.
I do not suggest that those bodies have harmed their professions. It would be wrong of me to make such a suggestion. However, if we want to condition the atmosphere to enhance the status of engineer, we must create a statutory body. The Government's current proposals for a body created by charter are not sufficient. I shall not go into detail on this matter, but I believe that, under a little pressure, the Government have conceded the point by putting the draft proposal for a charter in the Library.
9.15 pm
There seems to be no valid reason why those proposals should not be embodied in a statute. There is one key area in which the Government have already run into difficulty.
The draft charter, in page 5, states:
The individuals who, immediately before the date when the register is established, are registered in any section of the register maintained by the Engineers Registration Board shall be registered in the corresponding section of the first mentioned register.
That is difficult to get over at this time of night. But is the Council of Engineering Institutions, the custodian of the register, willing to give up the information to the new Engineering Council or will it resist giving such information? If so, what power have the Government to ensure that the Council of Engineering Institutions passes on the necessary information?
The Government are seeking to create another charter body which the existing body will view not as primus inter pares but as one with which it is co-equal. That will not do. We shall run into difficulties if we go along that road.
There are other minor points on which I should like to be satisfied relating to this new body that is to be created. There is no provision in this draft charter for an annual report to Parliament. That may not seem important in view of all the business that we have to do, but it was important to Sir Monty Finniston and his colleagues that Parliament should have an opportunity to debate the workings of the engineering authority. It may be that the Government have in mind getting a report.
There is a parsimonious provision of Government funds. In reality, no new funds will flow to this body. I do not want to digress too much. We have had speeches about North Sea oil and the revenue flowing from that to the Exchequer. We know that will amount to about £4,500 million in the current year and that it will increase. However, we are not proposing to devote any new funds to this important body to enhance the upstream, thrusting activity of the engineering dimension and the status of the engineering profession. Even if the funds are slight, what opportunity—I put it mildly as a member of the Public Accounts Committee—will the Comptroller and Auditor General have to examine the accounts of this proposed body?
I have purposely tried to be brief. The Under-Secretary of State for Scotland should pay more attention. The hon. Gentleman, having been born in Greenock, ought to know something about engineering. Therefore, he should pay attention when a Scot is talking about the engineering industry and its importance to the United Kingdom's economy.
I am concerned, albeit briefly, to express our disappointment at the Government's inadequate response to the Finniston recommendations. I know that my hon. Friend the Member for Bristol, North-East (Mr. Palmer) will want to make some points from his experience and background in promoting the Finniston report and his studies since.
I hope that, even at this late hour, the Government will have another think and will come to the conclusions that their proposals are inadequate. We need a statutory body to co-ordinate and bring together all these aspects to enhance the importance of engineering in modern times so that we may reassert ourselves as a leading industrial nation.

Mr. John Ward: It would be easy to go over the Finniston debate again tonight. I made clear in that debate that I was opposed to many of the recommendations of Finniston, and I remain so.
I declare an interest, as a chartered engineer and an elected member of the Council of Engineering Institutions. I believe that the good parts of the Finniston report—those parts that both sides of the House would wish to promote—can be carried forward only if they have the support of the engineering profession. There is much good will from the engineering profession, but it is not willing to go along with an organisation which it thinks will lack independence from external interference, not have any assurance of maintaining professional standards, and does not seem to take enough note of the experience and expertise that is already available in the engineering institutions. Moreover, the polls that have been carried out by the engineering institutions show that many of the 200,000 members of those institutions are still against the charter.
Some of those fears could be overcome by calm discussion round a table. The engineering profession and the professional institutions are anxious to co-operate with my right hon. Friend the Secretary of State to get an organisation that will benefit engineering in the near and long-term future. They fear that the organisation that is proposed could become a vehicle for nationalisation by a less enlightened Government than this one. They believe that if a vehicle for nationalisation is needed, the party opposite is capable of devising one without any help from this side of the House.
The first members of the Engineering Council will be appointed by my right hon. Friend the Secretary of State, and they will then be asked to devise byelaws under which their successors should be elected. I am a charitable man in these matters, but those who are appointed by the Secretary of State in the first place might be less than human if they did not see their image in their successors. I hope that, even at this late stage, my right hon. Friend will meet the heads of the professional engineering institutions—all 16 have rejected the proposed charter—and see whether there can be some common ground between him and them.
I repeat that there is much good will for what my right hon. Friend is trying to do, but there is much concern that by going along with his present ideas they will be providing hostages to fortune. Above all, they want to help him not to set up yet another Government quango. They want to be independent financially and in their professional judgment. We should support that view.

Mr. Arthur Palmer: The hon. Member for Poole (Mr. Ward) declared his interest as a chartered engineer and as a member of the Council of Engineering Institutions. I also declare an interest. I am a chartered engineer and a Fellow of two bodies that are affiliated to the Council of Engineering Institutions. I regret that the hon. Gentleman introduced a party note into his speech. We have had many discussions on the Finniston report almost entirely on a non-party basis, and I hope that it will remain that way.
As the House knows, I have taken a close interest in Finniston from the very beginning; indeed, it was partly at my suggestion perhaps that the committee was appointed. In Standing Committee I made a complaint that I have often made which is that the new council should have been set up by statute, as a matter of constitutional decency. The Secretary of State, with his great willingness always to listen, if not to act, nevertheless accepted the views of the engineering institutions in so far as they were expressed through the CEI and the four presidents that it should be done by means of the Privy Council.
I objected and object very strongly to that. It is a clumsy and bad procedure. In Standing Committee, the point I made was that the House was invited by the Secretary of State in this Bill to make funds available, by loan guarantees or otherwise, to his Privy Council body without the Standing Committee having knowledge at that time of what would constitute the responsibilities and powers of the authority.
Through the various channels open to me, I saw the first draft of the Royal Charter. I believe that it is now in its revised form available from the Library, but rather late in the day; it was not available to the Standing Committee. I was not impressed by the first draft Royal Charter. It seemed then to be very little improvement on what exists

already through the CEI. It is generally agreed that the CEI has not made a very great success of its job over the years mainly because the component bodies would not give it authority.
Since that time of the first draft there have been further consultations. It seems that the right hon. Gentleman has now to some extent broken the spell that the leaders of the engineering institutions cast upon him when he met them on 2 July. The truth is that they wanted just the minimum of change, if any change at all; they certainly did not want changes of the sweeping nature recommended by Finniston. But some forceful criticisms have been made of the first draft, through a series of consultations. They are not just criticisms by the engineering institutions, which hold one point of view, but criticisms made by industry, by the employers' side and by the trade unions, and particularly by those staff unions which organise chartered engineers. I have often made the point that the average chartered engineer in this country is an employee and not an employer.
Those criticisms of the first draft have had some effect, I believe, on the right hon. Gentleman's mind. He has now brought forward an amended draft, which is a considerable improvement, I admit, on the first draft, though I would have preferred it to be done by statute. But nothing, I fear, will ever bring the Council of Engineering Institutions into agreement with anything that the Secretary of State does, because at heart it does not want any change. It fought against the setting up of the Finniston committee. It is not surprising, therefore, that the new draft does not please the Council of Engineering Institutions since it has moved further away from its outlook.
I have here a letter from the Council of Engineering Institutions that was written on 28 January 1981 to the Secretary of State. Hon. Members such as myself are obliged to read this kind of thing to the House, because there has been no comprehensive Bill with a Committee stage. In the course of that letter the CEI stated:
We look forward to an opportunity, even at this late hour, for further discussion with your Department,"—
the discussions have been going on for months—
and we believe that this will have your support. But if such discussion is to be constructive and fruitful, it must be the aim to recast the Charter to take adequately into account the representations made in our letter of 22 October. Continuing exchanges on points of detail in the existing draft would serve little if any useful purpose. We must most emphatically stress that to persist with the Charter in its present form would carry with it a serious risk of creating unworkable relationships between the new council and the existing Institutions.
In other words, this is a plain threat of non co-operation if they do not get their way.

Mr. Ward: In the interests of clarity, I am sure that the hon. Gentleman would wish to explain to the House that the letter is from the 16 corporation presidents as well as the chairman of the CEI.

Mr. Palmer: I know that. They are equally mistaken. The error spreads itself.
The Secretary of State has leaned over backwards to conciliate and to meet the points of the engineering institutions. He must equally keep in mind the views of industry and the trade unions. If, in the end, the engineering institutions—one must not suppose that the councils and officials that run these institutions necessarily speak for the rank and file because they do not—will not


co-operate, he will have no alternative but to withdraw what he proposes now in this Bill and bring in a comprehensive Bill that would give the authority of Parliament to the necessary change recommended by Finniston over the whole field. Complete breakdown now would be unthinkable.

Dr. John Cunningham: I begin where my hon. Friend the Member for Bristol, North-East (Mr. Palmer) concluded. If the Secretary of State had done what my hon. Friend has suggested in the first place, we would not be sitting here this evening. When we discussed the clause in Committee, we were asked to discuss something that had not even been made public. The Committee was asked to accept something that it had not even seen. That was a rather unusual state of affairs, to say the least. The Government have moved a little way since that time. They have at least published the latest in a number of drafts of their proposed charter. As my hon. Friend the Member for Bristol, North-East and, indeed, the hon. Member for Poole (Mr. Ward) have stated, this proposal from the Government has no friends and no supporters. It has had none to date in this House. It has none among the engineering institutions themselves. That is not surprising.
What the Government propose, as hon. Members have indicated, is a long way from Finniston. It does not have much in common with what Finniston recommended. Perhaps if it did, the engineering institutions would still be opposed to it. That is not the point. What the Government suggest has no teeth. It does not require a statutory registration. It makes no definitive statement about finance. It is a series of very general proposals—I refer to clause 6 as a whole, but it is also true, in some measure, of the charter—which a number of people feel are not only inadequate but almost an affront to the engineering institutions themselves.
I hope that the Under-Secretary will state clearly who is in favour of the Government's proposals. We asked him this question in Committee. I repeat it now. Is the Committee of Vice-Chancellors in favour, or against, what is suggested? Is the CBI in favour? Or does it still adhere of the view of the 16 institutions responsible for the letter to which all hon. Members seem to have a copy? Is the Engineering Employers' Federation in favour of these proposals? Or is the federation, like most people, against them?
I shall quote one sentence from the letter from the institutions of 28 January:
It follows that the present draft remains unacceptable.
Nothing could be clearer than that. The institutions will not concede whatever control they exercise over the title "Chartered Engineer" to the new body that the Government propose.
What about the financial provisions? It is unusual for hon. Members on the Government Benches to be asked to vote for general enabling measures. If that was proposed by the Opposition, the Government would be up in arms. Conservative Members are also being asked to support financial provisions about which we have no details. We should like to know more about them.
What is so awful about a proposal not only to have statutory registration but to have a statutory body to govern engineering introduced in a Bill? For example, the General Medical Council, which is highly respected, acts as a

safeguard in the public interest and even exerts considerable influence over Government funding for medical training. It is a well established body. It is a good precedent, which we recommend to the Government for consideration. The GMC also involves a great deal of self-government for the medical profession. Such a provision would go some way towards meeting the point raised by the hon. Member for Poole (Mr. Ward) and the points raised by the institutions. Why should engineers not be treated in a similar way?
Clause 6 is not acceptable, as we made clear in Committee, and neither are the specific provisions for engineering. The Secretary of State should think again. I believe that the proposals will be severely mauled in another place and the Government may be forced to think again. They should therefore be gracious and make eleventh hour changes. It is not a party political argument. It is important to take this opportunity to get the situation right for engineering, which in turn is important for our future industrial prosperity.
The Secretary of State would be hard pressed to point to anything in the clause that remotely resembles a motive for change. Unless the Minister can convince us otherwise, we shall vote against the clause.

The Under-Secretary of State for Industry (Mr. John MacGregor): I shall start with three points on which I believe we agree. We agree that it is not a party matter. There are disagreements about certain aspects of the Finniston approach and our approach. Some of the disagreements are greatly exaggerated. There is much more welcome for the course that we are following than would appear from this short debate.
Nothing that I may say later will diminish my agreement with the point made by the hon. Member for Dunfermline (Mr. Douglas) about the importance of promoting engineering, and the engineering dimension. I dealt with that in Committee, but I should like to make it clear again. I entirely agree with the wider concept of the engineering dimension. We are now discussing the structural approach that should be taken to achieve that.
9.45 pm
I hope that we agree that there is much in the Finniston report—which we have widely welcomed—which is of great value and which is being pursued in other ways. This evening, we have picked out one important aspect of the Finniston report. Much of what was said in the Finniston report is being followed up. This disagreement does not, therefore, diminish the value of that report.
I turn to the specific effect of the amendment tabled by the hon. Member for Dunfermline. It seeks to delete the whole of clause 6. I recognise that the hon. Gentleman wishes to reopen the debate on the type of body involved. However, the amendment would remove two provisions which are comparatively small, but not unimportant. The first provision provides specific statutory cover for the financial support which this and previous Administrations have given for certain industrial/education activities—to which some of my hon. Friends referred in the earlier debate—which are aimed at improving the mutual understanding between industry and education, particularly at school level.
Until now, that support has been provided under the authority of the Appropriation Act. However it is an established principle—and I should have thought welcomed by this House—that statutory authority should


be sought at the first convenient opportunity for recurring items of expenditure. The Bill would provide that in the first part of its proposal. It would be unfortunate if we were to lose that opportunity by rejecting the clause.
The clause enables the Secretary of State to provide certain forms of support for the proposed chartered engineering body. As I made clear in Committee, our intention is that the body should be self-financing, but we are taking powers in this clause to guarantee loans to the body from the private sector during the initial period when it is set up, and, if it proves absolutely necessary, to make grants available to it during that initial period until it has become self-supporting.
The effect of the amendment would, therefore, be that existing expenditure on industrial-education activities would continue to be made solely under the authority of the Appropriation Act. I am sure that I do not need to persuade hon. Members that this would be unsatisfactory. Secondly, the Secretary of State would not be empowered—

Dr. John Cunningham: We understand what the Under-Secretary is saying. Nothing would be lost by that. We are asking the Government to go away and think again. That could be put right and no one would be short of money.

Mr. MacGregor: I recognise that the hon. Gentleman's point is central to the debate and I shall take it up later. If the clause were lost, I suppose that we could provide the money for the chartered engineering body under an Appropriation Act but—for the reasons I have given—it would be regarded as unsatisfactory. Therefore, the amendment might well prevent the body from becoming established.
I turn to the basic arguments that have been put forward.

Mr. Douglas: How long have these sums been made available to the organisations under the Appropriation Act? Will the hon. Gentleman indicate the difficulties involved if the Government review the situation and correct it in the other place?

Mr. MacGregor: I am not sure about the length of time, but a number of years are involved. We are taking advantage of this opportunity to put that right. As regards the hon. Gentleman's second question, I hope that I shall demonstrate why we feel that it is right to proceed in this way and not to lose the advantage of the limited power contained in the second part of the clause.
In Committee we heard the argument about the distinction between a statutory and a chartered body authority. That is the substance of the Opposition's criticism. I shall not go over the whole of that ground again, as I am anxious to make progress. However, the most important point is that the consultations that we engaged in earlier last year—Opposition Members agree that they were fairly extensive—did not show agreement—that has been made clear tonight—-but a clear desire for a new body. There was also a strong feeling that once set up it should work independently of Government and should build on existing practice where possible.
9.45 pm
The independence of Government argument is an important one. I recall the hon. Member for Whitehaven (Dr. Cunningham) reading a passage from a letter that

criticised some aspects of our proposals but made clear that the author—a very distinguished gentleman— supported the independence argument. That has been widely advanced by many others apart from the institutions which have responded to the consultations. It is important to recognise that it is a widely held view, a majority view, and that we are responding to it.
The hon. Member for Whitehaven exaggerated somewhat when he said that we are a long way from Finniston. He knows that the Finniston report did not propose any statutory powers for the new statutory authority. It was proposing an authority that in addition could report to Parliament. We believe that it is right for this body to be independent of the Government and that we have adopted the route that will enable that to happen.
The hon. Gentleman asked me who is in favour of the approach that the Government are taking. Inevitably, we have had the Opposition's views and the disagreements have been expressed. However, the Committee of Vice-Chancellors and Principals of the United Kingdom Universities, the Engineering Employers Federation and the CBI all support the draft charter. There is quite widespread support for the charter.

Dr. John Cunningham: Only recently.

Mr. MacGregor: The hon. Gentleman knows that the draft has been circulated comparatively recently.

Mr. Palmer: When the Minister referred to the bodies that support the draft charter, which draft does he mean? There have been so many drafts.

Mr. MacGregor: Only one has been circulated widely. At an earlier stage a draft was circulated to only a few individuals to try to arrive at a format that would be circulated more widely. The one that has been circulated more widely is the draft circular of 23 January, a copy of which has been put in the Library. That was done, as the hon. Gentleman knows, at the request of himself and his hon. Friend the Member for Whitehaven in the debate in Committee. I have responded to that by putting the draft charter in the Library. I did so as soon as it was circulated elsewhere.
I continue with the arguments that we rehearsed in Committee on the distinction between a statutory and chartered body approach. I have referred already to the wide consultation that we undertook. The response indicated a clear majority view and demonstrated that there would be widespread opposition to a statutory body, which would be thought to represent excessive Government involvement in the regulation of the engineering profession.
It is important that we make progress with the new body, in the light of the Finniston report. If we are to do that, it is important that we carry as wide a body of opinion with us as possible. It is important that we carry with us as much co-operation as possible, including those who have not been mentioned so often tonight—namely, the employers, who will have to play an important role in getting the new body off the ground. It is significant that the CBI is supporting the draft charter.
There is a difference of view, but the opposition to the chartered approach has had more support in the House than reflects the views outside the House of a group much wider than engineers but including, I suspect, many engineers.
I turn to some specific issues. The hon. Member for Dunfermline argued that in the light of the chartered


engineer title it would be more satisfactory to put that into statutory form. As I have explained, we want to proceed by agreement. There are some final matters to clear up that we are discussing with the Council of Engineering Institutions and other leading institutions. There is a widespread desire to adopt the chartered engineer title under the new arrangements, and we are hoping to facilitate that.
It would be unfortunate if the new body had to set up new qualifications and titles for engineers, which is what the Finniston report suggested. Legislation would not have helped, because the Finniston report gave its authority no powers. We believe that the best way is to proceed by agreement.
The hon. Gentleman asked about an annual report to Parliament and led me to believe that he thought that it would lead inevitably to an annual opportunity to discuss in Parliament the progress of the body. He knows only too well that there are so many candidates for discussion in the House that not all of them, by any means, can be accommodated in any one year. That must be a matter for the Leader of the House. But this is a point that I should be happy to consider possibly including in the charter. Again, as I have said, we want to get as much agreement as possible. One possible course would be to insist that copies of the annual report were deposited in the Library. But it is certainly a point that I should be happy to consider.
The hon. Member for Dunfermline referred to the fact that no new funds, as recommended by Finniston, apart from the possible funds that the Government may have to guarantee in the earlier stages, were being put to the new authority. It is easy to keep proposing new activities for which extra funds should be voted, but the hon. Gentleman knows only too well the difficult climate in which we operate in relation to public expenditure. Therefore, one has to take a view of priorities, quite apart from the fact that there are other reasons for taking the course that we are taking on the chartered body approach.
One of my hon. Friends mentioned a number of fears that are being voiced—in a somewhat exaggerated way, as I hope to prove—among the engineering institutions, or at least among the leaders of these institutions. There is some evidence that quite a lot of engineers themselves do not support the views at present being put forward. First, the fear that has been expressed that the Royal Charter body might become the vehicle for nationalisation of the professions seems to me to be quite unjustified. I cannot see how that could possibly be the case. I believe, however, that there has been much misunderstanding of the position with regard to the charter. I had hoped that the speech that I made in Committee—and I know how little attention is often paid to Standing Committee speeches—would have been circulated with the charter. Some of those who have seen that speech since expressing their original fears have now admitted that their fears have been removed altogether or to a large extent diminished. I therefore believe that one or two points that have been picked out of the charter, or even an earlier draft of the charter, have been used to suggest greater Government interference than actually would be the case in the charter itself.
With regard to the professional judgment of engineers, nothing that we are proposing will affect the importance

of professional judgment. As my hon. Friend will know, however, there are wider considerations behind the setting up of the new body.
My hon. Friend made two further points. First, he had fears that the people whom the Government appointed for the first three years would be self-perpetuating and that this would in itself indicate how the Government would continue to retain control. I must make clear that the reason for the Government doing this in the first instance is to get the new body off the ground with as wide agreement as possible and in as objective a way as possible.

Dr. John Cunningham: How will the new body get off the ground if the Council of Engineering Institutions refuses to concede its control over the title of "chartered engineer"?

Mr. MacGregor: As I indicated earlier, I believe that this is an area in which progress can still be made, where some of the misunderstandings about the charter and the Government's approach can really be thrashed out. We have had from the various organisations 280 suggestions for the chairman and members of the new council, which I believe indicates the degree of support which exists for the approach that we suggest. Finally, we are still awaiting the detailed comments of the institutions and others to whom the draft charter has been circulated. Clearly, those detailed comments will be taken into account.
I think that I have already dealt with some of the points raised by the hon. Member for Bristol, North-East (Mr. Palmer) in relation to the draft charter. I hope that he will realise why the draft charter was not before the Standing Committee on 15 January, because it was not actually circulated until 23 January when we placed it in the Library. I understand his objections. We have already debated them at considerable length, as the hon. Gentleman has discussed them within the engineering profession, though not always with full support.
It is now important to get on with the initiative that was set up under Finniston, to establish as much agreement as we can and to get the new body set up.
I made a number of points in Committee which I believe would set at ease many of the fears of the engineering institutions. I should therefore like, in conclusion, briefly to repeat some of them. Since the matter was debated in Committee there has been considerable comment in the press and outside, much of which I believe to be based upon a misunderstanding of the Government's position. Nothing in the Government's proposals is intended to diminish the importance of the role of the engineering profession or its institutions.
The proposed council will consult the engineering institutions, and so far as possible work through those institutions which can satisfactorily apply the standards determined by the council. Although the Government will appoint the first chairman and members, they will do so in such a way as to reflect the very broad range of interests involved. Thereafter, the council will act in its own right under the charter, and, as can be seen from the draft, there is no question of the Government being given powers to direct the work of the council.
We would expect, and, indeed, intend, that any future proposals put forward to the Privy Council by this body for its future constitution would reflect that same balance of interests; and, indeed, that there would be full


consultation before such recommendations are made. Without this, the council itself could not possibly fulfil its objectives in the future. I stress again the great importance which we attach to the regulation of the engineering profession in this regard, taken in the wider context of national economic needs, which Sir Monty Finniston himself so eloquently defined in his excellent report.
It is for this most important reason, which goes to the very heart of the matter, that we seek a genuine consensus to move forward, and a commitment from employers, the educational system, the individual engineer, and his representatives.
I hope that I have made the Government's intentions perfectly clear, so that this House and all those concerned may be under no misapprehensions, and that on this basis we may all move forward together in this important matter. We will obviously welcome detailed amendments to the proposals we have already made and we look forward to receiving them, but we must now make progress on the broad basis established, and with that in mind I hope that the House will reject the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 108, Noes 152.

Division No. 62
[9.56 pm


AYES


Alton,David
HomeRobertson,John


Armstrong, RtHon Ernest
Homewood,William


Atkinson, N.(H'gey,)
Howells,Geraint


Bagier,Gordon A.T. 
Hughes, Robert (Aberdeen N)


Beith, A. J. 
John,Brynmor


Benn, Rt Hon A. Wedgwood
Johnson, James (Hull West)


Bidwell,Sydney
Jones, Rt Hon Alec (Rh 'dda)


Booth, Rt Hon Albert
Jones, Barry (East Flint)


Bray, Dr Jeremy
Jones, Dan (Burnley)


Buchan,Norman
Kerr, Russell


Callaghan,Jim(Midd't'n&amp;p)
Lambie,David


Campbell-Savours,Dale
Lamond,James


Carter-Jones Lewis
Leadbitter,Ted


Cocks, Rt Hon M. (B'stolS)
Leighton,Ronald


Coleman, Donald
Lestor, MissJoan


Conlan,Bernard
Lewis, Ron (Carlisle)


Cowans, Harry
Litherland,Robert


Crowther,J.S. 
Lofthouse,Geoffrey


Cryer,Bob
McCartney,Hugh


Cunliffe,Lawrence
McDonald,DrOonagh


Cunningham, DrJ.(W'h'n) 
McElhone,Frank


Dalyell,Tam
McGuire,Michael(lnce)


Davidson,Arthur
McKay,Allen(Penistone)


Davies, Ifor (Gower)
McMahon,Andrew


Davis, T. (B'ham.Stechf'd)
McNally,Thomas


Dixon,Donald
McNamara,Kevin


Dormand,Jack
Marks,Kenneth


Douglas,Dick
Marshall,D(G'gowS'ton,)


Douglas-Mann,Bruce
Marshall, DrEdmund (Goole)


Duffy, A. E. P. 
Maxton,John


Dunn, James A. 
Millan, Rt Hon Bruce


Eastham, Ken
Miller, Dr M. S. (EKilbride)


Evans, loan (Aberdare)
Mitchell,Austin(Grimsby)


Evans, John (Newton)
Morris, Rt Hon C. (O'shaw)


Ewing,Harry
Mulley,Rt Hon Frederick


Fletcher, Ted(Darlington)
Orme, Rt Hon Stanley


Foster, Derek
Palmer,Arthur


Freeson, Rt Hon Reginald
Penhaligon,David


Freud,Clement
Powell, Raymond(Ogmore)


Garrett, John (NorwichS)
Prescott,John


George, Bruce
Roberts, Ernest (HackneyN)


Golding,John
Rowlands,Ted


Graham,Ted
Silkin,Rt Hon J.(Deptford)


Grant, George (Morpeth)
Skinner,Dennis


Hamilton, W. W. (C'tral Fife)
Spearing,Nigel


Hardy, Peter
Spriggs,Leslie


Harrison, Rt Hon Walter
Steel, RtHon David


Haynes, Frank
Stoddart,David


Hogg, N. (EDunb't'nshire)
Thomas,Dafydd(Merioneth)



Thorne, Stan(PrestonSouth)
Whitlock,William


Tinn, James
Wigley,Dafydd


Wainwright,R.(ColneV)
Winnick,David


Walker, Rt Hon H.(D'caster)



Welsh,Michael
Tellers for the Ayes: White, Frank R. 


White, Frank R
Mr. Joseph Dean and


Whitehead,Phillip
Mr. George Morton. 


NOES


Ancram,Michael
LeMarchant,Spencer


Atkins, RtHonH. (S'thorne)
Lennox-Boyd,HonMark


Atkinson,David(B'rn'th,E)
Lloyd, ian(Havant&amp; W'loo)


Banks,Robert
Lloyd, Peter (Fareham)


Benyon,Thomas(A' don)
Loveridge,John


Berry, HonAnthony
Lyell,Nicholas


Best, Keith
Macfarlane,Neil


Bevan, David Gilroy
MacGregor,John


Biggs-Davison,John
MacKay,John(Argyll)


Boscawen,HonRobert
McNair-Wilson,M.(N'bury)


Bright,Graham
Madel, David


Brinton,Tim
Major,john


Brooke, Hon Peter
Marten,Neil(Banbury)


Brotherton,Michael
Mather,Carol


Brown,M.(BriggandScun)
Maude, Rt Hon Sir Angus


Bruce-Gardyne,John
Maxwell-Hyslop,Robin


Bryan,SirPaul
Meyer,SirAnthony


Bulmer,Esmond
Miller,Hal(B'grove)


Butcher,John
Mills, lain (Meriden)


Carlisle.John(Luton West)
Mills, Peter(West Devon)


Carlisle,Kenneth(Lincoln)
Moate,Roger


Chapman,Sydney
Montgomery, Fergus


Clark, Hon A. (Plym'th, S'n)
Morrison, Hon P.(Chester)


Clarke,Kenneth(Rushcliffe)
Murphy,Christopher


Clegg,SirWalter
Myles, David


Cockeram,Eric
Neale,Gerrard


Colvin,Michael
Needham,Richard


Cope,John
Nelson,Anthony


Cranborne,Viscount
Newton,Tony


Crouch,David
Normanton.Tom


Dean, Paul(North Somerset)
Onslow,Cranley


Dorrell,Stephen
Page, John (Harrow, West)


Dover,Denshore
Page, Richard (SWHerts)


Dunn,Robert(Dartford)
Parris,Matthew


Dykes, Hugh
Patten, John(Oxford)


Fairgrieve,Russell
Pollock,Alexander


Faith, MrsSheila
Porter,Barry


Fenner, Mrs Peggy
Prentice, Rt Hon Reg


Fletcher, A. (Ed'nb'ghN)
Proctor, K. Harvey


Fletcher-Cooke,SirCharles
Rathbone,Tim


Forman,Nigel
Renton,Tim


Garel-Jones,Tristan
RhysWilliams,SirBrandon


Glyn,DrAlan
Ridley,HonNicholas


Goodhart,Philip
Rippon, Rt Hon Geoffrey


Goodlad,Alastair
Roberts, M. (Cardiff NW)


Gorst,John
Rossi, Hugh


Griffiths, PeterPortsm'thN)
Rost, Peter


Grist, Ian
Sainsbury,HonTimothy


Grylls,Michael
Shaw, Giles (Pudsey)


Hamilton, Hon A. 
Shepherd, Colin(Hereford)


Hamilton,Michael(Salisbury)
Sims, Roger


Hampson,DrKeith
Skeet, T. H. H. 


Hawkins,Paul
Smith,Dudley


Hawksley,Warren
Speller,Tony


Henderson,Barry
Spicer, Jim (WestDorset)


Hill,James
Spicer, Michael (SWorcs)


Hogg.HonDouglasGr'th'm)
Sproat,lan


Holland,Philip(Carlton)
Stainton,Keith


Hordern,Peter
Stanbrook,lvor


Hunt,John(Ravensbourne)
Stewart,Ian(Hitchin)


JohnsonSmith,Geoffrey
Stewart,A.(ERenfrewshire)


Jopling,Rt HonMichael
StradlingThomas,J. 


Joseph, Rt Hon Sir Keith
Taylor, Teddy (S'endE)


Kaberry,SirDonald
Tebbit,Norman


Kershaw,SirAnthony
Thompson,Donald


Kilfedder,James A. 
Thornton,Malcolm


King, Rt Hon Tom
Townend,John(Bridlington)


Knight,MrsJill
Viggers,Peter


Knox, David
Waddington,David


Lang, Ian
Waldegrave,HonWilliam


Langford-Holt,SirJohn
Walker-Smith, Rt Hon Sir D. 






Wall,Patrick
Williams,D. (Montgomery)


Ward,John
Wolfson,Mark


Warren, Kenneth
Young, SirGeorge(Acton) 


Watson,John



Wells,Bowen
Tellers for the Noes: 


Wheeler,John
Lord James Douglas Hamilton


Wickenden,Keith
and Mr. Selwyn Gummer

Question accordingly negatived.

It being after Ten o'clock, further consideration of the Bill stood adjourned.

Orders of the Day — BUSINESS OF THE HOUSE

Ordered,

That, at this day's sitting, the Industry Bill may be proceeded with, though opposed, until any hour.—[Mr. Le Marchant.]

New Schedule


'REPEALS


Chapter
Short title
Extent of repeal


1975 c. 68.
The Industry Act 1975. 
Section 8(2A) to (2C). 


1976 c. 75. 
The Development of Rural Wales Act 1976. 
Section 12(3). 


1979 c. 32. 
The Industry Act 1979. 
Section 1(2) to (4) 


1980 c. 33. 
The Industry Act 1980. 
In section 5, in subsection (1) the words "section 8(2) of the Industry Act 1975" and "The National Enterprise Board and", and subsection (2).

Statutory Instruments


 S.I. 1980/1211.
The Financial Limits (National Enterprise Board and Secretary of State) Order 1980
The whole Order. 



S.I. 1980/235. 
The Development Board for Rural Wales (Financial Limit) Order. 
The whole Order.. 
—[Mr. MacGregor.]

Brought up, read the First and Second Time, and added to the Bill.

Question, That the Bill be now read the Third time, put and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — EUROPEAN LEGISLATION

Ordered.

That the Standing Order of 2nd July 1979 relating to the nomination of the Select Committee on European Legislation, &c. be amended, by leaving out Mr. Mark Lennox-Boyd and inserting Mr. David Myles.—[Mr. John Stradling Thomas.]

Bill, as amended (in the Standing Committee), again considered.

Orders of the Day — Clause 7

SHORT TITLE AND EXTENT

Amendment made: No. 18, in page 4, line 29, at end insert—
'(1A) Section 1 of this Act comes into force on 31st March 1981
(1B) The Acts and instruments specified in the Schedule to this Act are repealed to the extent set out in the third coulmen of that Schedule.'.—[Mr. MacGregor.]

Orders of the Day — Roadline Depot, Kirkdale

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Le Marchant.]

Mr. James A. Dunn: I am grateful for this opportunity to express my absolute opposition to the proposals of the National Freight Company contained in its corporate plan to close and transfer the Roadline depot in Townsend Lane, Tuebrook, within the Liverpool, Kirkdale constituency.
I wish to draw attention to the dire consequences for the commercial and business life of the city if the proposal is to be implemented in accordance with the first proposal. There would be tragic consequences for employment against a background of an already unacceptably high level of unemployment. That would be inflicted at a time when job opportunities are scarce. It would also have a tragic impact upon those with long-standing loyal service to this enterprise. The far-reaching consequences will be a burden not only upon those who represent that enterprise, but upon their families and the neighbourhood.
The city is suffering greatly from high unemployment. The recent figures show that there are 51,000 presently upon the unemployment register. Those figures do not disclose the full truth because a number of people do not register for further employment when they become unemployed. They include those working part-time and the casually employed, and others who would not register for a variety of reasons, including domestic reasons.
I wish to convey to the Minister the anxieties and disquiet felt by the Liverpool city council, and the concern and apprehension of all small businesses in the city, which have always depended upon an effective, efficient and


economically based road haulage, parcels delivery and collection service. I also draw attention to the distress that will be caused to other industries which have been dependent upon this form of service, including the mail order stores, of which there have been recent declarations of financial and commercial difficulties.
If Roadline closes at Townsend Lane, that will have other effects upon the National Carriers depot at Wavertree Road. It will have disastrous consequences upon the Huskinson dock freight line services and have a general impact upon Merseyside, and Liverpool in particular. The area would be deprived of a reputable and reliable national road haulage parcels and service and carrier. The rail linkage, which has been built up, will be grieviously affected and no doubt will disappear as a regular service for customers. That would all be to the detriment of the economic future of Merseyside's industry and commerce. It would have disastrous consequences throughout the surrounding area.
British Road Services has operated on Merseyside always in the Townsend Lane-Brick Road area. That enterprise was successfully operated from 1947–48 until a new Roadline depot was started at Townsend Lane. I cannot be certain of the date, but I think that it was either 1959 or early 1960. If I recall events correctly, the transfer was well received at the time and was applauded by the then Conservative Administration as a step forward in a co-ordinated transport policy.
The depot is well located geographically. It is almost on top of an inner city ring road—there is no need to build another. It has the advantages of an urban ring road—Queens Drive—of which the hon. Member for Liverpool, Wavertree (Mr. Steen) will be well aware. It is very close to the M6, and it is a stone's throw away from the M62. If one turns over backwards, one falls over the M58. It is not too far to two Mersey tunnels—we have one to spare. That soon takes traffic to the Wirral. From the Wirral the journey is anyone's guess—to North Wales or Cheshire. One could find oneself at Runcorn in a very few minutes once one reached the M53. In terms of geography and the road network, therefore, the depot is ideally situated.
The East Lancashire road, Southport, Preston and the coastal areas are well served by Queens Drive and the Southport Road. They provide a direct route all the way up the coastline and to Preston. The ease of access has been of great advantage to the undertaking. It has been able to build up a good custom. If National Carriers and the National Freight Company were to relinquish their participation at Townsend Lane, that could cause havoc to the business interests located on Merseyside, and particularly in the centre of Liverpool.
I am reliably informed that the present operation could easily be extended tenfold. I am told that handling and storing of the traffic would cause few problems either long or short term, because warehousing facilities are readily available in the redundant dockside warehouses in the north and south of the city and in Birkenhead. All these facilities that once represented a burden to the business are now an assistance to it because of the closure of the south docks and the reallocation of the warehousing resources.
I am also told that to meet any further requirements for a road-rail link the yard is adjacent to a rail line and is not far from the major marshalling yard at Edge HillSpekeland Road which is not always currently fully utilised. I therefore fail to understand the closure

proposals, unless—here I chide the Minister and I hope that he will take it in good part—this is part of the Government's policy to withdraw and leave the lucrative part of a parcels collection and delivery agency for private enterprise to make a considerable success of.
In recent times Labour and Conservative Governments have recognised the very special needs of Liverpool and Merseyside generally and have given it special development area status. It has been accepted that the city cannot overcome the historic imbalance of its infrastructure from its own resources. Hence, the introduction of the inner city partnership with considerable financial investment. The urban development corporation is soon to commence work. Ministers who have answered questions on this topic have shown that considerable resources will be made available to enable it to fulfil its promise.
There is to be an enterprise zone which it is hoped will rejuvenate and regenerate some of the industries that have been failing on Merseyside. All this investment is dependent on a good road network and communications system. It is no use having roads if there is nothing to run on them, to make the deliveries and to provide the service.
The difficulties, I understand, are that, while the Government may provide the road communications and services that are so desirable, we shall be denied the means of transport, the units that will carry the traffic.
The Departments of the Environment, Industry, Employment and Transport have contributed to and participated in the grand plans for the rejuvenation of the area. I fail to see how they can hope to be successful if they do not have the support of a carrier service by road haulage and the rail and road links that are necessary.
Why is the unit to be closed? If I were to speak honestly, I would say that I believe that it is part of a concerted campaign which has not been well thought out by those who are carrying out some aspects of Government policy. In an indirect way, they are denationalising publicly owned industry. In so doing, perhaps I am making an appeal to the Minister for reconsideration and asking him to stop the closure forthwith. Perhaps my appeal will fall on deaf ears. However, I know that he will have been advised to say, as part of his answer tonight, that the commercial management of this undertaking must be left to resolve some of its own problems and that it is no part of the Government's operation to intervene or to interfere.
I hope that the Minister does not say that, because in any other industry there would be a shareholding. The Minister will be aware from speeches made by hon. Members representing Liverpool and Merseyside constituencies of some of the problems and difficulties in this area. Shareholding rights would have been expressed in such a way as to persuade a board by logic to change its decision. In this case, the shareholders are the taxpayers. They have no direct voice—only through the agency of the Government. The Minister must not neglect to fulfil that responsibility. It would be unacceptable if he decided to plead that the commercial confidentiality and decisions of this enterprise should be left to its own experienced specialists and members of the board. There would be no counterbalance and check.
I conclude by appealing, even at this late stage, to the Minister to cause a complete revision of the proposals. If this unit were to be transferred from Liverpool to another geographical area—perhaps Greater Manchester—there would be an all-round journey of 60 miles. That would be


an on-cost, and, with mileage, demurrage and maintenance on vehicles, could soon make a partial service uneconomic to operate on Mersey side. That would be a tragedy for all and would belie what the Government have said about their intentions to rejuvenate Merseyside, and Liverpool in particular.

Mr. Anthony Steen: I am grateful to the hon. Member for Liverpool, Kirkdale (Mr. Dunn) for allowing me to intervene in this debate about a matter which concerns all on Merseyside, and in Liverpool in particular. The Minister must realise that the situation in Liverpool is becoming so serious that all of us are increasingly embarrassed to say in the Chamber that there is another closure or another series of jobs being lost. At the moment there is a danger of losing 1,600 jobs in Tate and Lyle. Men will never have the chance to work at those jobs again.
I am told that this unit is a successful road haulage business running above budget which provides an invaluable service in Liverpool. It has already lost 135 jobs in the last two years through redundancies and is now down to 120 jobs. It is the last outpost of the National Freight Company on Merseyside. This would be a serious matter anyway, but it is doubly serious in an inner area of Liverpool which is increasingly resembling a shanty town. There are many people without jobs and many firms are closing. This situation is causing all Liverpool Members great heart-searching.
Whereas the private sector is prepared to compete with all other private sectors throughout the country in fighting for business in difficult times, the Conservative Party must not put any obstructions in the way of small firms or businesses which will prevent them from operating or discriminate in such a way as to make life more difficult for people on Merseyside.
There seems every reason why there should be a National Freight Company presence on Merseyside. Speaking as a Conservative Member for a Liverpool constituency, I urge the Minister to recognise the gravity of the situation not only for this company, which will have another 135 men laid off, but for the whole of Merseyside. If the Government do not prevent this kind of company closing down—a company which supplies a real need in a modern purpose-built plant in Liverpool—there will be nothing to stop the rest of the cards from collapsing.
All Liverpool Members must be equally concerned about the Government intervening to prevent another series of redundancies in favour of Manchester. That is happening time and again. One company in Liverpool or on Merseyside is closed and another company is opened in Manchester.
I urge the Minister to give us some hope that the NFC will continue to have a presence on Merseyside and that more jobs will not be driven out to Manchester.

Mr. David Alton: I wish briefly, knowing that the Minister will want to reply, to endorse wholeheartedly what has been said by the hon. Members for Liverpool, Kirkdale (Mr. Dunn) and

Liverpool, Wavertree (Mr. Steen). They have my total support. I hope that the Minister will respond with a message of hope for the people of Liverpool.
There are more than 100,000 people out of work on Merseyside and the social and economic implications are incredible. This set of redundancies will add to an enormously growing picture of redundancy.
I hope that the Minister will tell the House that there is hope for Merseyside. I hope that, having listened to the hon. Member for Kirkdale, he will be prepared to intervene and do something about the matter.

The Under-Secretary of State for Transport (Mr. Kenneth Clarke): It was with great regret that I heard that the National Freight Company had announced the forthcoming closure of the Roadline depot at Townsend Lane, Liverpool. No date has yet been fixed for the closure, but the company expects to close the depot within the next three months, and operations from that depot will be transferred to Manchester. That closure, if it is carried out, will involve the loss of 115 jobs in Liverpool.
I appreciate what has been said by the hon. Members for Liverpool, Kirkdale (Mr. Dunn) and Liverpool, Edge Hill (Mr. Alton) and my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen). This is a matter of grave concern for Merseyside, which has already suffered great blows. I fully understand the concern that led the hon. Member for Kirkdale, for whom I have great respect, to raise this matter. Indeed, he has won all-party support.
The fact is that the NFC has taken the decision, not the Government. There is no question of the Government intervening. The company is now discussing the matter with the unions with the aim of minimising redundancies. It has apparently been agreed that the Liverpool employees will be offered such jobs as will be available in Manchester when the transfer takes place, but I regret that not many jobs can be offered in that way.
All three hon. Members who have spoken have asked me to explain the Government's role and to ask the Government to intervene because of the impending closure. Roadline is a subsidiary of the NFC. That is now a Companies Act company. My right hon. Friend the Secretary of State is the owner of all the shares. It is the Government's present intention to float the company in the near future. When we float the company, we probably will sell the Government's interest so that it becomes a fully private operation. But, even when it was a nationalised corporation, the rule was, as the hon. Member for Kirkdale anticipated, because he once stood at this Box and therefore knows the situation, that Ministers did not intervene in the day-to-day management of the corporation or seek to override the business judgment of the professional management. When they attempted to do so they invariably made a mess of it. When it was a nationalised corporation, that had no effect on the trading position or the job security of those who worked for it.
The National Freight Company and its subsidiary, Roadline, have found themselves in difficult times in recent years because of their falling profitability in a very competitive market. Before this Government came into office, and before there was a change of policy, the number of employees in Roadline nationally fell from 11,200 in 1969 to 6,775 in 1979—a loss of 40 per cent. of the total jobs in the operation over 10 years, when it was a fully nationalised corporation under two successive


Governments of different parties. That is not a happy story. It is an unfortunate history of lost jobs and dwindling business. I hope that that helps to refute the suggestion that lay behind the speech of the hon. Member for Kirkdale that the present problems arose out of a change of policy by this Government or other underlying political aims.
Roadline has been going through a difficult time as a trading company, and there will be no job security and no long-term future for the company until it returns to profitability and it is put on a sound trading basis. Therefore, we have to leave the matter to the business judgment of the managers and not interfere in the day-to-day management decisions that they must make, even when they face difficult decisions, as they do at the moment. That is not to say that we intend to act irresponsibly on behalf of the taxpayers, who are the 100 per cent. owners of the shares. Of course, we exercise control over the investment and borrowing of the company in order to discharge my right hon. Friend's responsibility for the shares that he owns to Parliament and to the public, who are the real owners of the company.
In addition to being responsible for the sound management of the assets and the money, we as Ministers, are also concerned about the well-being of the work force. If they are to have secure jobs with a real future when they become privately owned, the NFC and Roadline will have to be turned round into profitability and established as strong competitive commercial undertakings.
I am glad that the National Freight Corporation as a whole has made impressive strides in recent years and is rapidly turning itself round to become a competitive and profitable enterprise. That has to be done, and anything that deters it will threaten more jobs in the long term than are involved at the moment. As a loss-maker it has no future, and none of its subsidiaries can provide secure job prospects for those who work within it. It is necessary to pursue a strategy that gets it back on to a sound footing. I am satisfied that the management of the NFC is now doing that.
I turn to the difficulties of Roadline, which have given rise to this particularly worrying problem in the inner city area of Merseyside. It is in the parcels business and, unfortunately, that is a very crowded, fiercely competitive part of the road haulage industry. There is a large amount of parcels traffic in Britain—about 210 million parcels a year—with a total expenditure by customers of about £500 million. But if we leave aside the Post Office, there are at present nine large national parcels carriers in the market, including Roadline and National Carriers, which are both owned by the NFC. There are a number of significant small operators. The recession has reduced business, and there is intense competition, with a need for greater efficiency.
British Rail is making enormous losses on its collect and deliver parcels service, and it has been forced into a decision to withdraw from the market, which has left the other parcels operators competing to gain the extra business and to put themselves on a profitable and successful footing.
Roadline was formed in February 1976 from the parcels division of British Road Services. I am afraid that over the years its trading results have deteriorated badly. It used to be profitable to a small extent. It first went into a loss in 1976, it has been making losses for the last two years and it is expected to make losses this year. But I am glad to

say that the NFC has decided on a rehabilitation strategy for Roadline which is designed to reduce costs, improve financial performance and achieve a reliable delivery service for the customers.
The present strategy is designed to provide a guaranteed 24-hour service for the bulk of the company's traffic by 1982. The NFC regards this as necessary to compete effectively and is having to rationalise its business in order to achieve that. It shows that the company is planning a future for the business. It is looking at the financial problems it faces which have led to such a dramatic loss of jobs in Roadline over the last 10 years. It is trying to halt the bleeding away of business and jobs and to provide a secure future for a number of employees who really can be supported by the business. I am afraid that the Government cannot interfere with that commercial judgment and start trying to make the company take short-term decisions under political pressure which will interfere with the recovery of the business.
I therefore have to resist what has been put to me. I appreciate that this kind of response is bound to come from Merseyside, where there has been so much bad news for the last two years, with job loss after job loss. The firm of Tate and Lyle was mentioned by my hon. Friend the Member for Wavertree. I have visited the plant and know the part that it has played in Liverpool and in the clocks for so long. It must be a very bad blow in the city, and it is very hard for Merseyside to take another loss of this kind as part of the reorganisation of a national business.
But the Government certainly have not intervened to take the jobs from Liverpool and put them in Manchester. The constant Government involvement in Merseyside is to try to stop this job loss and to regenerate the area. The whole purpose of the policy underlying the urban development corporation, and the reason for the constant ministerial visits to Liverpool that are going on at the moment is to try to establish a basis for the local economy to begin to revive and for jobs to be won back, for derelict land to be used and for new investment to take place to offset losses of this kind.

Mr. Eric Ogden: Will the Minister at least recognise the inconsistency? He has said that the Government are trying to help Merseyside. He has listed some names. At the same time, a company in which he and his Ministers are major shareholders is doing exactly the opposite privately, as it were, to what he and his Ministers claim that it is doing. Roadline is running as a city centre to city centre major operation in order to make a profit. In the meantime, the Minister has an area which is being denuded of the real competitiveness of private parcels.

Mr. Clarke: As I have tried to explain, looking at it nationally, as one must first of all, Roadline is a business which is losing over £1 million each year. It has no future as a business anywhere in the United Kingdom if it cannot stop that rate of loss.
The process of decline that I have described as taking place over the last 10 years would continue to the point of the company's extinction. The company is trying to reverse that and to turn itself round, but it is having to reduce the number of depots and rationalise its business in order to get a streamlined 24-hour service to its customers. I wish it success in that effort.
It is my very deep regret that one of the losses which have resulted from that rationalisation has fallen on


Merseyside. But the future of Merseyside must depend on the efforts that the Government are putting in to regenerate the economy in other ways by the winning of new investment and improving the infrastructure of the city bringing all the derelict land in the south docks and so on back into use. I am afraid that the future of Merseyside will not be secure if the Government step in and keep one depot going for a month or two more in totally loss-making and futureless effort.

Mr. James A. Dunn: Perhaps the Minister will have a quick look at the real commercial prospectus of Townsend Lane. On the basis of 2,500 parcels daily pick-up, if it is a commercial proposition, and if it has not made losses itself, will he consider the matter and readvise Roadline accordingly?

Mr. Clarke: That involves the Government having to check the commercial judgment of Roadline, which says

that the depot is contributing to the losses, and that the closure of the depot would contribute to the revival of the business.
I hope that the discussions going on between Roadline and the unions will produce some easement in the redundancy figures, and that some of the staff will take jobs in Manchester. But the future of jobs in the parcels business depends on putting the business back on a sound competitive footing. Ministers cannot take the decisions to do that and civil servants cannot take them, but I have every confidence that the management will eventually.
All these disasters will redouble the efforts of the Government to do something about the underlying problems of Merseyside and bring some new investment back into the area.

Question put and agreed to.

Adjourned accordingly at twenty-one minutes to Eleven o'clock.